By Stuart McDougall
Rummaging through the Financial Mirror archives, attention was brought to ten years ago today. In 2004 – despite having Limassol as Europe’s second cheapest city – Cyprus was still ranked the most expensive country to retire to in Europe. As we all know, ten years can be a very long time.
Ten years, three Presidents, one financial crisis and still unfortunately no Eurovision winners later, we find ourselves wondering exactly where we stand. Is Cyprus still a haven for those looking to settle in the warmer climates or are expatriates settling down elsewhere in the EU to enjoy their retirement?
With UK expatriates in Cyprus peaking at 24,046 in 2008, according to Cyprus Property News (http://www.news.cyprus-property-buyers.com/ ) and with this number in decline as well as falling house rates, you would be forgiven to believe you should be witnessing a mass exodus. However, current reports would suggest that Cyprus is in fact moving along steadily in comparison to the rest of the EU.
A recent survey by expatarrivals.com showed that while Nicosia is still the island’s most expensive city, it only ranked “as the 88th most expensive out of the 100 cities in Europe that were surveyed. When only factoring in consumable products, however, that ranking rockets up to 48th.”
Now, before we start fleeing from supermarkets or contemplating hibernation during winter months to cut costs, it must also be stated that the standard of living in Cyprus is still much cheaper than other European countries. Local taxes must also be looked at as well where some regions of Cyprus enjoy less than a third of council tax when compared to the likes of the UK. Also, when comparing groceries to the likes of the UK, Cyprus still holds its own as being substantially cheaper for the same baskets of goods.
As stated before, the number of UK expatriates is in decline, however, on closer inspection it can be seen that those leaving to return home, despite tax benefits on pensions, are of an older age-range. There seems to be no clear indication of why there is a decrease in older expats leaving Cyprus, but statistics show that as one generation leaves, another is slowly taking its place. Cyprus is now finding its feet with new blood, of a younger generation – not only with a brand of music repulsive to the human ear, but also looking to invest and settle within the island.
Current statistics show that since 2008, some 60,000 Brits have bought property in Cyprus. With prices dropping by 10.5% (www.globalpropertyguide.com) in 2013 to give apartments an average value of GBP 87,000 and houses an average of GBP 275,000, it’s a good time for foreign investors to start afresh in a new climate. A recent report co-produced by the Cyprus Investment Promotion Agency (www.investcyprus.org) ranks Cyprus 37th out of 185 economies in the ease of starting a new business – although not top ten, this must still prove an important factor to investors who can see a country on the rise.
One such location hugely benefiting from home-based and foreign investment is Limassol. Investment into Limassol has allowed them to escape their bittersweet title of “Europe’s 2nd cheapest city” with having currently developed its 300 mln euro marina with its selection of homes, social and retail opportunities attracting a whole new host of clientele with business opportunities. It will obviously be a work-in-progress to keep it fresh and appealing as well as finishing other projects to provide more homes and office space, however, anyone who has had the chance to visit this new development can already sense the excitement and new life which is being fed in to the city.
Although there is a long way still to go, the trend of fresh investment into Cyprus is welcoming for everyone. Despite the lack of elderly pale expats roaming the beaches, we now have a generation with money in their pocket determined to invest and be successful. Overall, this will improve career prospects for those living on the island as well as give the chance for a construction industry to find its feet in preparation for new lives in the sun.
It has been a long ten years, but Cyprus is fighting back to the position she deserves to be in through home and foreign based investment. With the flux of new, younger expatriates we all hope that they can hang around after their work is done and make Cyprus a retirement haven once again.
Stuart McDougall works in the insurance and banking sector and is based in Glasgow
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