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Holding Cyprus up

14th August 2008 | back to article listings BACK    print this article PRINT

With so many countries around the world - Britain, the US and the eurozone - seeing the effects of the credit crunch, the question on the lips of those investing in property may be this: What is it about some markets that gives them a greater capacity to withstand the current crisis?

Cyprus, it seems, is one of these markets. The boom of recent times is well known about and much of it can be attributed to factors such as its European Union membership since 2004. But such a factor may be considered an ephemeral one, with new membership no longer being new after a while.

A report in the Cyprus Mail noted that the country was one of just three stable markets in Europe in the last financial quarter, according to the Royal Institution of Chartered Surveyors (Austria and the Netherlands were the others). However, the paper added, there are some potential problems, with some hard-pressed investors selling up because of declining economic fortunes back home or claims of oversupply.

However, the island actually possesses a number of structural advantages that work in its favour, Varnavas Pashoulis, President of the Cyprus Association of Valuers and Property Consultants stated. While acknowledging that there may be problems in Cyprus as elsewhere, he noted: "Cyprus has its advantages that we are a small country and the demand can easily catch up, we are not like Spain where there is a need for a saturation period in the market for example."

He added: "Unlike elsewhere, developers here do not start to build unless they sign a contract in most cases. What happened in the UK was that many houses were being built while demand was still high and remain unsellable as the demand dropped. We do have things going for us."

One factor Cyprus certainly has going for it is an ability to attract tourists, with its climate, beaches, history and cultural variety. Marios Christodoulou, a spokesperson for tourist authority Love Cyprus, described the island as "one of the most popular tourism destinations in the world, let alone Europe".

He added: "Cyprus is getting more and more popular as it is undergoing increasing development for tourism and special interest tourism, with 52 blue flag beaches and high quality activities like golfing, diving, nature trails, cycling and much more."

While Mr Christodoulou has a professional responsibility to promote the island, this factor cannot be underestimated. Critically, the tourism authority has noted that a large proportion of visitors come back again. Not only is this an endorsement of the country as a visitor destination, but for investors, it is a reason to have long-term faith in Cyprus, since regular visitors may be just the people to consistently hire buy-to-let property aimed at tourists.

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