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Investors in Cyprus told to head north

5th April 2007 | back to article listings BACK    print this article PRINT

Property investors in Cyprus need to look to the north of the island rather than the south, Investors Provident have advised.

The small but beautiful country in the eastern Mediterranean is becoming a boom area for investment in the overseas buy-to-let market, offering the benefits of EU membership, warm weather, sunshine and beaches, high inland mountains offering winter skiing and an immensely rich heritage influenced by various civilizations over thousands of years.

Yet all these benefits have brought a problem, according to Investors Provident. The market in the south of the country has become "saturated", says director Hetal Shah, who states that properties in locations such as Paphos that were worth around £25-30,000 two years ago now cost around £50-55,000.

With the popularity of the south having caused prices to soar as development booms the best opportunities are elsewhere, or, to be precise, in the north.

Of course, in Cyprus, north and south means something like east and west used to in Germany. For Berlin read Nicosia, a divided capital in a country split between Greek and Turkish parts. The analogy is partial, of course - the country is at peace, albeit with the two sides divided by a UN-patrolled buffer zone. Newsmax reported in March that part of the dividing wall in Nicosia had been torn down without any retribution and access between the two parts is far easier to accomplish. Above all, the self-declared Republic of Northern Cyprus is unrecognized by any government except that of Turkey. However, the de facto two-state situation is real enough. Attempts to formally reunify the country as it joined the EU in 2004 ended in failure.

Yet this situation is one which can benefit investors, says Mr Shah. The north is "definitely" the place to go, he advises, offering cheaper prospects and an escape from the tourist honeypots, with a fully-furnished one-bedroom apartment available at around £35,000.

He said: "There's a lot more [property] to be had, it's a lot more unspoiled than the south. The south has been very commercialised by tourists, whereas the north has remained very untouched. It's a lot more picturesque."

Being administratively outside the EU and therefore not subject to the same laws, the risk is greater, Mr Shah notes, but it clearly has an attraction to a niche market, namely the over-50s, keen to escape the young 18s to 30s holiday crowd and the main source of growth for the nascent northern tourist industry. Hetal Shah says many holidaymakers actually start in the south and then head north, where they can escape the "lager louts."

So the advice from the experts is clear. Across the divide there is another Cypriot opportunity, one that enterprising investors should pounce on. As Hetal Shah puts it: "It's definitely one place to watch out for in the next three to five years."

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