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Cyprus enters the Premier League

13th August 2008 | back to article listings BACK    print this article PRINT

With the football season just starting, talk of the Premier League is on many lips. But overseas property also has its elite division and like its sporting equivalent there are promoted sides hoping to do well.

Property portal Homes Overseas this week revealed that two new destinations had joined its own nominated "Premier League", these being Morocco and Cyprus, with Slovakia and Australia being relegated.

For Cyprus, this is a further endorsement of a market that has come a long way in recent years, thanks to a variety of developments in the country. These include its membership of multinational organisations, including Nato and the European Union since 2004. Since then, the portal notes, the economy and particularly the property market have seen substantial growth, with 18.6 per cent year-on-year growth in prices and foreign mortgage availability increasing. Despite all this the average property price is an eminently affordable £149,000.

Such a list of attributes suggests that Cyprus has indeed got plenty going for it. While there may also be some problems, these are not necessarily insurmountable. For example, the inflation rate is up, with the harmonised index for consumer prices in July up to 5.3 per cent from 5.2 per cent in June, RTT reports. But because Cyprus now has the euro as its currency, the monetary policy response to this is the same for many of Europe's other markets, namely the hawkish anti-inflationary policy of the European Central Bank. Therefore the island is neither at an advantage or a disadvantage.

One key area that may have an impact on the fortunes of the country is tourism. If reunification of the island happens, many may look to explore the north, particularly the coast near Famagusta, but this could be a long way off and the fact that some property issues are high on the agenda in reunification talks may suggest that getting involved with northern property could carry too many risks.

Those investing in the safe and growing southern market may have been pleased to read the recent news that major efforts by tourist officials to boost this sector appear to be bearing fruit. Last month the Financial Mirror noted that after five months of slight decline in year-on-year numbers the tally of visitors jumped by 8.8 per cent in June, with a 7.7 per cent increase among Britons.

Investors may look further than their own countrymen, however. The paper added that the tourist figures showed increases of 19.5 per cent among Russians and 17.6 per cent from Swedes, with Germans 2.8 per cent up. Overall, any drop in visitors in the previous few months had been made up, with the five months between January and June 2008 seeing a year-on-year rise of 2.7 per cent from 964,097 to 989,851.

Should such an improvement continue, Cyprus may find it does not just survive in the Premier League, but thrive.

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