Assetz® News - Staying south in Cyprus

Staying south in Cyprus

6th March 2008 |

These are exciting times in Cyprus. A few weeks ago the first round of the presidential election saw incumbent Tassos Papadopoulos narrowly ousted in a close three-way contest. The remaining two, left-winger Demetris Christofias and right-wing candidate Ioannis Kasoulides, both indicated they were ready to talk to the Turkish north about reunifying an island that has been divided since 1974.

Such commitments were a break from the policies of Mr Papadopoulos, who rejected a UN-backed reunification plan in 2004, the year Cyprus joined the European Union. Now, with Mr Christofias finally emerging as the new president, the possibility has been re-opened.

Yet those looking at investing in property in Cyprus should not think of heading north just yet, advised overseas property portal Amberlamb.com's director Rhiannon Williamson. She said that reunification could bring "massive investment" to the north, with direct flights to Ercan airport, large increases in tourism and a property boom as a consequence.

Yet, at the same time, she cautioned: "However, there is a way to go before this situation is reached."

Thus, with the possible process of change at its beginning and the uncertainty of when, or if, it will be completed, investors in the country should go on looking at the south. There are certainly places with good prospects there right now, Mr Williams stated.

She suggested Larnaca as one such prospect, with a whole range of infrastructure and tourist facilities being introduced at present. Among these, she listed an airport upgrade, new roads, a new marina, golf courses, theme parks and hotels plus retail park developments.

"It's an area that has been overlooked for many years, but which is now receiving the fiscal attention in warrants," Ms Willaimson commented.

This sort of investment coming into Larnaca now is the kind of thing which may go into northern towns in years to come if the unification process really does work. But such eventualities are not certain and if they happen it could be many years hence. The south remains where it's at.

If ever extra proof of this were needed, it lies in the latest house price figures, which make instructive reading for anyone looking for markets where prices are still rising. The Royal Institution of Chartered Surveyors European Housing Market Review, published this week, found that of all European countries only Cyprus and Iceland, at 15 per cent each, saw higher house price inflation in 2007 than in 2006. While the latter island will have its attractions, it has an unfortunate lack of warm sunshine.

Places like Larnaca therefore offer investors a present day reality rather than a possible future hope. While the whole of Cyprus can offer history, scenery, sunshine and cultural variety (the present Turkish and Greek elements following a long and historic line of influences), it is the south which offers the best of now.