Last updated January 2018
Cyprus is positioned at the crossroads of Asia, Africa and Europe unrivalled connectivity to all three continents.
Important Landmarks for Cyprus was becoming a full member of the EU in 2004 and joining the Eurozone in 2008.
With 340 days a year of sunshine and 57 Blue Flag Beaches Cyprus has the climate to attract and keep international investors and their families.
Since the long publicized problems of earlier in the decade Cyprus has gone from strength to strength having reinvented itself as a tax haven for businesses and High Net Worth Individuals (HNWI).
Cyprus now has one of the most favorable tax and business friendly regimes in Cyprus
Tax Benefits of Cyprus
Another big driver for inward investment has been the EU permanent residency and EU Passport and Citizenship program. Just through the Exclusive Hot Properties network we are aware of over 500 Million Euros worth of investment into property and that does not include the additional investment from those HNWIs moving business interests and setting up new business in Cyprus.
The Cyprus economy currently has GDP of 17.4 Billion Euros which is made up of 81.7% of services, 15.9% of Industry and 2.4% of Agriculture. The Economic trends are good for the future with GDP for 2016 at 2.8%, 2017 at 3.1% and projected at 2.5% for 2018. 22% of the economy is based on Tourism and 34% on Real Estate. Finally another major positive factor was company registrations were up 27% in 2016.
In the second quarter 2017 market research by RICS they made the following observations
The Property Price Index has recorded increases on an annual basis in all cities and asset classes, with significant increases being recorded in Limassol, Nicosia and Larnaca, whilst Paphos and Paralimni have shown smaller annual increases.
Across Cyprus, on a quarterly basis rental values increased by 3.0% for apartments, 1.0% for houses, 2.0% for retail, 3.7% for offices and 0.7% for warehouses. Compared to Q2 2016, rents increased by 8.3% for flats, 10.2% for houses, 6.8% for retail, 14.4% for offices and for warehouses 4.2%. All asset classes have shown a consecutive quarterly growth.
At the Q2 of 2017 average gross yields stood at 4.1% for apartments, 2.1% for houses, 5.4% for retail, 4.3% for warehouses, and 4.9% for offices. The parallel reduction and/or stabilization in capital values and rents are keeping investment yields relatively stable and at low levels (compared to yields overseas). This suggests that there is still room for some repricing of capital values to take place, especially for properties in secondary locations.
If we then turn to the PWC 2017 first half report they report the following transactional Volumes
From an Exclusive Hot Properties point of view as 95% of our clients are buying via the Golden Visa or Golden Passport it’s very positive in that what they invest in is likely to have both rental yield and capital growth even if there primary reason for buying the property was a residency or citizenship based decision. So this should also be a positive point for those who are thinking of retiring to Cyprus or relocating from a colder European country.
Saying all of the above the other benefits such as very low taxation, residency or Citizenship and Business friendly government are much more likely reasons to invest in Cyprus property but the bottom line here is Cyprus has many good reasons why you should consider investing in Cyprus property.