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The property market in Cyprus was buoyant last year with high levels of sales recorded in both the residential and commercial sectors.
The increased demand pushed up prices, so investors were happy. Rental returns were also impressive. One survey, conducted for the Danos real estate group, showed rents had increased by 15% over the year.
All of which will have tempted many ex-pats to dabble in the Cyprus property market and this is reflected in a remarkable figure – 47% of property purchases here in 2018 involved foreign nationals; 4,367 transactions out of a total of 9,242.
The opportunity to obtain a Cypriot passport has attracted many foreign buyers and there was also a lot of interest in commercial developments such as marinas, shopping malls and mixed developments.
But before you jump on the bandwagon you should reflect on the advice that has stood the test of time since the Romans coined the phrase: ‘Caveat emptor’ – let the buyer beware.
Figures for December contrasted unfavourably with the rest of the year. Some 48% fewer sales documents were submitted compared to the same month in 2017. The biggest fall was recorded in the Famagusta district with a 73% drop, followed by Nicosia (57%), Limassol (45%), Larnaca (43%) and Paphos (34%).
Real estate specialists have dismissed these figures as a statistical blip. They point out that December 2017 saw a rush to buy ahead of a 9% VAT imposition on land sales leading to an inevitable fall in December 2018. By contrast, sales across the year showed a steady increase.
I have no reason to doubt this. But the December figures should, at very least, give would-be investors cause to pause. Property is a sound investment if you understand the game. If not, you would be wise to stick to Monopoly.
I am not thinking here of expats buying a home for themselves. Cyprus is a wonderful place to live and there are beautiful properties to be had at reasonable, albeit rising, prices, with the resort areas of Paphos and Famagusta particularly attractive to expats. Problems with the absence of title deeds, and long delay in their issue, seem largely to be a thing of the past, although it is still vital to take legal advice about the status of a property before agreeing to buy.
‘Caveat emptor’ are the first words of a longer Latin phrase: ‘Caveat emptor, quia ignorare non debuit quod jus alienum emit’ (let a purchaser beware, for he ought not to be ignorant of the nature of the property which he is buying from another party).
That is sound advice for anyone buying property on Cyprus or anywhere else. And it is particularly relevant for anyone thinking of a larger investment in the property market.
It is easy to look at a house and decide if it is right for you. It is quite a different matter to assess the market and decide if it is where you want to place your capital.
If you are an expat with money to invest and you want it to grow, you need to take advice.
Let me declare an interest here. My company, the Woodbrook Group, is an international firm of financial advisers and, of course, we would be very pleased to handle your business. But whoever you take advice from, make sure it is sound and impartial and do not rush into any investment without knowledge.
The Woodbrook Group is not owned by any financial institution or life insurance company. This makes us different from the majority of financial advisory companies and means we can offer you unbiased and impartial advice tailored to your individual requirements.
