Published on : Tue, 10 May 2005 00:00GMT
by : Lucy Andrews

Cyprus really seems to be having some hot property! According to a report by a property investment company, Assetz, Cyprus has recorded a rise of about 18% in 2004 in its house prices and there are high possibilities of the prices increasing considerably by about 50% when the island country gets entry into the European Union in 2007.

Assetz added that Cyprus was flooded by investors looking for buy-to-let properties, which had the potential to become two-fold in value in just a period of three years. Managing Director of Assetz, Stuart Law, said, "High standards and low costs of living along with virtually non-existent crime rates make Cyprus an attractive option for investors."

With the island joining the EU, a fall in mortgage rates from 7.5 per cent to Euro rates of 3.5 per cent, is also being expected. This would further fuel the property prices in the country to shoot up.

Law added, "Prices are still considerably lower than in France or Spain - a three-bedroom detached villa with a private pool would currently set you back around £250,000, which would probably only stretch to a two-bedroom apartment in France. Capital growth is expected to continue at a high level for the foreseeable future due to interest from buyers all over Europe and the undersupply of property."

Assetz specified that Paphos was a favourite amongst investors and tourists for its picturesque scenery, breath taking sea views, excellent infrastructure as well as a perennial tourist industry. Other potential areas for investment were Polis and Larnaca that were priced lower than Paphos, and were becoming preferences, as people were also looking further away at villages in Cyprus and thereby a substantial amount of capital investment here was imminent.

Nevertheless, there is another side of the coin too and investment in Cyprus is not free of hurdles and problems. There are certain rules that an investor has to abide to buy property in this country. As explained by Law, "There is a ‘sixty day rule’ for registering land purchases in Cyprus when buying off plan. It is essential for the buyer’s lawyer to register the purchase within sixty days in order to preserve the purchaser’s legal rights over the land on which the building will sit. If this is not done, the land remains the property of the developer until after the development is completed or beyond."

Law advised investors to refrain from investments in the North of Cyprus because several Greek Cypriots had come back to the land they once possessed after movement and trade restraints were lifted last year when Cyprus joined the EU. Law explained, “Greek Cypriots have returned to land they lost and are claiming restitution or negotiation with one particular high-profile court case in the papers just last week. For this reason I would not advocate buying in the North until these issues have been resolved.”