Assetz® News - Warming up in Cyprus

Warming up in Cyprus

3rd April 2009 |

Those looking to invest in property overseas will have spent the last year wondering where they might find a place with good prospects for growth. The difficulty with a world recession is that good news can be hard to find and in property markets in many countries this has been borne out as values have plunged.

Cyprus has remained relatively unscathed in terms of its own wider economy, not suffering a recession as many of its eurozone colleagues have. However, growth is lower and recently the governor of the Cypriot central bank, Athanasios Orphanides, spoke of how the credit crunch has affected the island.

As it happened, Mr Orphanides was optimistic about credit conditions, stating that there will be cheaper borrowing available soon. He said: "We have already seen reductions in specific commercial banking products and lending rates and I expect further significant reductions in loan rates in time.''

Cyprus, therefore, is not a country without problems stemming from the economic downturn. One obvious one is that tourist numbers have fallen, with many of the overseas markets - including Britain - hit hard by the recession. The result has been less tourists heading to Cyprus.

Discussing the impact of this on the Cyprus property market in recent months, UK sales manager for property firm Atlas International Paul Field confirmed that this has had a negative influence on the level of sales. In particular, he stated, "currency and cost of flights out of season" were key factors. The former, of course, has been a symptom of Britain's woes, which have been reflected in the low value of the pound against the euro, while the latter may be linked to the hit the airline industry has taken from the drop in international tourism across the board.

But for Mr Field, this is a transitory situation, one which will resolve itself when the world economy picks up again. Noting that "new golf courses, marinas and theme parks" provide reasons for Cypriot property remaining a good investment, he predicted: "Once the summer arrives and people start holidaying again, people will again start to fall in love with the island."

As it happens, there are those who will emphasise the out-of-season charms of Cyprus. They include Independent writer Linda Cookson, who visited Cyprus in March and contrasted spring weather with that of her customary Greek island haunts. She stated: "A reputed 300 days of sunshine a year make it a very appealing prospect for visiting outside of the regular summer season. In early spring, when Greece has yet to warm up, Cyprus is usually blue-skied, balmy and ablaze with fields of flowers."

So if Cyprus is literally warm already, it may well be that summer sees it heat up again. According to Paul Field, Larnaca should be the focus of this as this is where Atlas has been seeing the most activity, thanks to a number of new developments such as a golf course and a theme park. It might be that in Cyprus, winter will turn out to be short-lived in every way.