Euro news fuels Cypriot property boom

Increased interest in Cypriot property listed on TheMoveChannel.com has pushed the holiday hotspot up 3 places to break into the Top of the Props Top 5!  Here we investigate just why there is so much interest in Cypriot property at present...

With its unique blend of climate, culture and clubbing, Cyprus is one of the most popular tourist destinations in the Mediterranean.  From the stillness of Ruins of Salamis to the commotion of the Ayia Napa night clubs, the Mediterranean’s 3rd largest island throngs with visitors every year, drawn to its many varied attractions.

With Euro membership just around the corner and property prices rising month-on-month this year, foreign interest in Cypriot property is showing no signs of cooling, as reflected in the movements in this month’s Top of the Props chart.  An increase in the number of enquiries about Cypriot properties listed on TheMoveChannel.com over the last month has given Cyprus a leg up 3 places to break into the exclusive Top the Props Top 5.

The Top of the Props chart reflects the share of overall monthly enquiries to TheMoveChannel.com each country receives.

Airline investment to bump up tourist numbers

With its wealth of heritage sites, perfect climate, blue flag beaches and buzzing nightlife, Cyprus attracts over 2.4 m tourists annually.  This crucial industry brings in more than £1.3 billion a year, contributing around 15% of the island’s GDP.

The issue of air travel is critical for further tourist development in Cyprus.  Panos Englezos, Chairman of the Cyprus Tourism Organisation (CTO), recently stated that new budget airline routes have resulted in a “significant increase of arrivals from Greece, Russia and Scandinavia.”  Mr Englezos has affirmed his commitment to increasing the number of budget carriers operating routes to the island.

In June, Cypriot President Tassos Papadopoulos promised to back the further expansion of the country’s tourism industry.  Speaking at the opening ceremony of the Hoteliers’ Pancyprian General Assembly in Nicosia, he said, “The government, evaluating correctly the decisive significance of tourism to the economic development of the island and the people’s welfare, maintains in its priority, interests and aims, the continued upgrading of this key sector.”  The upgrading of Larnaca and Paphos airports is due to be completed by the end of 2009.

Euro announcement sparks investor interest

With English widely spoken, a legal system based on English law, a stable economy and low mortgage rates, Cyprus is a popular place for Britons to own homes abroad.  According to the Cypriot Land Registry, 12,000 of us have already made the move and now own homes on island.

George Lacey of Lacey & Co. commented: "As prices have risen in Spain and other Mediterranean areas, Cyprus has become increasingly popular, especially with British buyers.  Prices in Cyprus are still very reasonable in comparison to Spain and Portugal, with countryside restoration properties available from around £50.000.  If you throw in the ideal climate, the fact that English is widely spoken and the country's excellent health care system, Cyprus is an ideal place for Brits to buy abroad."

Cyprus is in the middle of a housing boom at present.  According to Financial Mirror calculations, the BuySell Home Price Index has risen on average by 9.3% year-on-year so far this year, compared with 5.9% for the whole of 2006, suggesting Cypriot house price growth is actually accelerating.  Factors cited to explain this trend include July’s EU announcement that Cyprus will adopt the Euro in January 2008, a decrease in local interest rates, a lack of Cypriot housing supply and a rush by investors to beat the imposition of 15% VAT on land purchases from 1 January 2008.

Mark Bodega, Marketing Director at currency specialist HiFX, commented: “Since it was announced that Cyprus would adopt the Euro in January 08, we’ve seen interest in Cyprus almost double.  Our figures show, that whilst the numbers of Brits buying holiday homes in Cyprus has remained relatively static, this increase is largely due to an increase in investors.  It seems that whilst the Cypriot Pound has effectively been fixed against the Euro for the past two years or more, this recent announcement confirms the island’s economic maturity and the promise of a share in the spoils of the recently improved EU-wide growth story.”

However, Simon Tweddle of PropertySecrets.net urged caution, saying “I think over the next year or two we will see prices continue to rise at around 20% per annum, though investors must be careful that they only buy into quality developments and avoid areas that are in danger of becoming oversold, to protect their rental and resale strategy.  Overall the long term prospects for property prices are healthy in Cyprus and the country makes an excellent location for second home buyers.”

Source: The Move Channel

Cyprus house prices up 1.8% in July, 9.7% y/y

Residential house and apartment prices in Cyprus rose for the seventh consecutive month in July 2007, as the BuySell Home Price Index rose by 1.8% over the previous month to 129.05.

Compared with the same month of the previous year, home prices in Cyprus rose by 9.7%.

The average home price according was recorded as CYP 100,546 (EUR 171,793).

The BuySell Home Price Index was created and is updated monthly on behalf of BuySell Cyprus Real Estate by MFC S. Platis.

The Index is announced during the second week of each month and depicts the movement of prices at which residential properties are sold in Cyprus, based on the extensive BuySell Cyprus Real Estate database.

For more information on the methodology of the Index and on Hedonic Prices please refer to: The “Asking Price and Transaction–based Indices for the Cyprus Housing Market (Rebased)” by Dr. Stelios Platis and Marios Nerouppos of MFC S. Platis.

The BuySell Home Price Index constitutes the only valid gauge of the Cyprus housing market and is considered as an effective tool for home buyers, sellers and investors.

Source: Financial Mirror

Global housing boom shifts focus, Cyprus keeps up

The global house price boom continues in 2007, albeit at a much slower pace and with different set of countries.

A dramatic slowdown has taken place in several countries in Europe, despite an evident rise in the rate of price changes in Cyprus.

House prices in Estonia, 2005 and 2006’s star performer, rose only 5.68% y-o-y to Q1 2007, dramatically lower than the 77.52% y-o-y increase to Q1 2006.

Higher interest rates and an overheating market were the main causes of the slowdown. The key interest rate of the European Central Bank (ECB) has been raised nine times to 4% in June 2007, from its historic low of 2% in Nov 2006.

Other European countries that experienced lower house price changes y-o-y to Q1 2007 than in 2006 included France, Sweden, Ireland, Spain, Greece, the Netherlands, Switzerland and Portugal.

Ireland’s annual house price growth slowed to 7.44% y-o-y to Q1 2007, a deceleration from 12.07% y-o-y to Q1 2006. Apart from the higher interest rate, the heating issue on Stamp Duty also contributed to the decline.

Cyprus, on the other hand, enjoyed a 1.33% rise in the annual change in house prices in the first quarter of 2006, a figure that jumped to a 9,87% rise in the first quarter of 2007.

The U.S. house price rise also slowed to 4.07% y-o-y to Q1 2007, down from 12.78% y-o-y to Q1 2006. The Federal Funds rate has risen sharply from its low of 1% in May 2004 to its current level of 5.25%. The Fed has kept the rate unchanged since June 2006. This rate increase has meant trouble for sub-prime borrowers, leading to delayed payments and foreclosures.

Source: The Financial Mirror

Cyprus inflation up at 2.4 pct. in July

Consumer prices in Cyprus rose 2.4 percent on the year in July, up from a 1.9 percent annual rate in June, the national statistics service said Thursday.

The largest year-on-year increase came from sharply higher prices for health care costs, which were up 6.41 percent. Prices in the heavily weighted index for food and nonalcoholic beverages, were up 6.31 percent.

Education costs were also 4.87 percent higher on the year.

Source: Business Week

Cyprus and Malta in Euro boost

The past week has been particularly good for Cyprus and Matla property investors…Perhaps the biggest news has been the announcement by the European Union that the island can enter the euro currency system from January next year.

Cyprus and Malta were chosen ahead of other contenders to enter the European single currency system, in what will surely prove a big boost for the island's economy.

According to financial analysts, the move "will all but eliminate the risk of a currency crisis" by putting the weight of the European Union's economy behind the island.

According to currency specialists HiFX, the Cypriot property market will see the benefits of adopting the Euro. The company believes that the strong economy will add to the lure of the good weather and local culture.

A spokesman said the EU decision "confirms an economic maturity and the promise of a share in the spoils of the recently improved EU-wide growth story".

Property markets will continue to grow

Mark Bodega, marketing director of HiFX, commented: "We predict the property market on both islands to continue to grow due thanks to a number of reasons. British purchasers like the legal system in Cyprus as it is easy to understand-being based on the English one”.

According to statistics collated by HiFX, the number of Britons that have made an enquiry about investing in a Cypriot property has more than doubled over the past 12 months. Perhaps the lure of the good weather is proving too much - it has certainly helped boost holiday bookings in this washout British summer.

London Greek News recently conducted a telephone survey of travel agents and tour operators in London. The newspaper wanted to determine if there had been any upturn in the number of holiday bookings being made to Greece and Cyprus in the past few weeks - and the answer was a resounding yes.

Mario Demetriou MD at EuroMed Travel said "I have seen a positive move up in bookings, people wanting to book anywhere hot especially Cyprus and Greece".

With the weather showing no signs of making any improvement in the near future, it is a safe bet that there will be even more Brits booking their place in the sun.

Source: Assetz press release