Cyprus economy to grow strongly by 3.6% in 2007

The Economy Intelligence Unit (EIU) maintained its CyprusGDP growth forecast at 3.6% and 3.8% for 2007 and 2008 respectively. The EIU says that with slowing demand in both the Euro area and the UK in 2007-08, tourism is likely to recover only slowly, and real GDP growth in Cyprus will continue to be driven largely by domestic demand. According to EIU the construction sector will be boosted bycivil engineering projects (upgrade of airports and highways) and demand for holiday homes. The construction of new marinas and golf courses could also begin in 2008. Furthermore, financial services should get an extra boost as the adoption of the Euro leads to a further fall of commercial lending rates and expands opportunities for outward investment. The British agency believes that government consumption growth will remain fairly buoyant in 2007-08 as the presidential election approaches. EIU sees the strict airline security alerts in the UK as the main risk to the Cyprus GDP growth forecast, as they might put off UK travelers, while cruise tourism will remain vulnerable to any bursts of violence in the region. Regarding inflation the EIU says that the risk that Cyprus willmiss its inflation target for adopting the Euro appears to bereceding, as inflation is beginning to ease. It also expects that the easing of international oil prices will lead to a fall of inflation rates in 2007-08. The EIU forecasts inflation (EU Harmonized CPI measure) at 2.0% for both 2007 and 2008.Regarding interest rates, the EIU says that the Central Bank of Cyprus will probably keep rates on hold, allowing the spread with the EU rates to fall to 75bps, given that ECB is expected to raise its rates by another 25bps in March 2007. This means that Cyprus rates will converge rapidly towardsECB rates after mid-2007 and as previous experience suggests this will happen in the last two months before the adoption of the Euro.The British agency observed that the Cyprus currency hasconsistently traded closed to, but stronger than the central parity rate and it expects that this is the rate which is going to be used when the irrevocable fixing of exchange rates takes place. This will imply a mild depreciation from the current rate. In 2007-2008 the Euro is forecast to strengthen against the sterling but weaken against the dollar in 2007, after appreciating strongly in 2007. EIU believes that government targets with regard to thebudget are broadly realistic and while the budget deficit is expected to increase in 2007, since it is a pre-election year, it expects the deficit to remain below 2.0% of GDP in 2007-08. While EIU expects the 2006 public debt/GDP ratio to exceed the 60% of GDP threshold, a large primary surplus will allow the ratio to fall compared with 2005 and therefore probably meet the requirement that it is falling rapidly enough towards that threshold. It also says that although the sharp increase in euro-denominated borrowing is indicating higher external debt forecast, Cyprus will continue to find easy access to finance. EIU forecasts a current account deficit of 5.6% of GDP in 2007, falling to 5.5% of GDP in 2008.

Source: Financial Mirror

Cyprus property market to boom in 2007 - Famagusta District to rise by 20%

Property in Cyprus is set to boom in 2007, with price rises of up to 15%.The island is among the established property markets, which will be the hotspots for 2007, while emerging destinations such as Bulgaria and Croatia are set to cool.Estate agent Evripides Lemonaris told The Cyprus Weekly that flats and houses will see increases of 10%-15%.“Land is set to see even higher increases this year, up to 20%-25% due to the prospect of the introduction of VAT on plots of land in 2008. Expected demand this year is set to put prices up,” Lemonaris said.Property expert and project manager Antonis Loizou, said that the property scene on the island is set to see a boom with an expected increase of up to 10% at least for most properties.According to Loizou, land and development projects in urban areas will see an increase of around 12% while areas near towns will go up 15%.
Nicosia office property, Loizou said, would see an increase of at least 20%, as a result of demand, and this goes for old and new buildings.each land is also set to see an increase of 20% and land near the sea front will go up, at least 15%, Loizou said.
The free Famagusta area, including Paralimni and Sotira villages, will increase by 20% and property in Larnaca 10%.Holiday homes in tourist areas across the island which are not near the sea front will go up 15% and land outside tourist zones will increase between 15%-20%, he told this newspaper.Loizou agreed with Lemonaris that plots of land would go up by at least 20% as a result of the changes in local planning provisions and the prospect of the introduction of VAT next year.The main reasons for the overall increase in the local property market this year was supply and demand, due to low interest rates (only 4%) in deposit accounts, foreign demand for property on the island and the change in the mentality of locals, who now prefer to buy property than live in rented accommodation.
Loan facilities

“The facilities given by banks, with up to 30 years for paying back, has made Cypriots to want to buy a home and sell it at a later stage for an even better one, rather than live in rented accommodation, “ Loizou said.
Source: Cyprus Weekly

Low-cost airline announces route to Cyprus

Monarch is to start scheduled flights from Luton to Cyprus next year as the airline expands its network to the Eastern Mediterranean.

The airline claims the four flights a week from Luton to Larnaca will be the first low-cost scheduled flights to Cyprus from the UK. Flights will start on March 26 with one-way fares starting at £69.99, including taxes and web booking discount. Seats can be booked from next Wednesday on the carrier's website. Flights will operate on Monday, Tuesday, Wednesday and Saturday using Airbus A321 aircraft with 213 seats. Monarch scheduled services managing director Tim Jeans said: "Cyprus Airways and British Airways have operated a high fares cartel to Cyprus for decades which we'll break with our widely available, flexible low fares. "Our new service will be warmly welcomed not just by the growing holiday and overseas property markets in Cyprus, but the 150,000 strong Greek-Cypriot community in London, who've been deprived of choice and low fares until now." "Monarch's onboard service is also perfectly placed to provide an ideal level of service for the four and a half hour flight time, with extra legroom seating, free inflight entertainment - including full length feature films and the provision of hot and cold food all available."

Cyprus has the highest population growth in the EU

Cyprus has the highest population growth rate in the EU, according to “ cyprus in the EU Scale”, published by the Statistical Service CYSTAT in October 2006 and released last week.

The statistics show that the population growth rate in Cyprus in 2005 was 2.6%—much higher than any other EU country. This compares with an EU 25 average of only 0.5%. The second highest growth rate, of 2%, was recorded by Ireland, while the third highest was Spain, at 1.6%Cyprus also scored well in higher education with 29.4% of 15-64 year-olds having tertiary education, compared with an EU average of 21.9%. The highest proportion is in Finland, with 34%, while the lowest is Malta, with 10.9%.

Source: Financial Mirror

Dionyssus Golf View Apartments, Tersefanou, Larnaca - SOLD OUT

Three weeks after launching Dionyssus Golf Villas and Apartments at Tersefanou, Larnaca the 80 apartments have now sold out and there are only 11 of the 26 villas remaining. If you wish to receive details of these villas, which are located on the ridge overlooking the new PGA golf course (completing in 2008), then please call Karon on 0151 482 5675. But make it quick as the prices on the remaining villas will be raised next week.Why was this development so successful?I think there are a number of reasons:

• Location: it is located in one of the 2 main capital growth regions on the island, namely Famagusta District (Paralimni, Protaras) and South Larnaca (Pervolia, Kiti, Tersefanou)• Price: significantly below market value which was recognised by many of our investors. Indeed, one such investor was offered a 1-bedroom apartment in a less favourable position on another site for the price of a 2-bedroom on the Dionyssus Golf View development.• Long completion date: mid 2010 gives your investment plenty of room to grow• Finance package: long mortgage terms and interest-only mortgage payments

• InvestinCyprus.com service: unrivalled investor service which includes sales, re-sales, furniture, lettings and property management all under one roof with the need to speak to only one person – your personal investment consultant.

If you wish to register your interest in any of the developments we presently have available, which can all be found on our website at www.investincyprus.com, or wish to be informed ahead of the crowd when we release new developments, then please give Karon a call on 0151 482 5675.

Cyprus to receive Euro 800 million from the EU

The Cyprus government is expected to receive EUR 800 mn from the EU for the period 2007 – 2013. EUR 400 mn will be used for corporate development, employment, education of human resources and research and development. EUR 212 mn will be used for infrastructure projects, whilst an amount of EUR 162 mn will be used for agricultural development and EUR 20 mn for the fishery sector.These funds will help the government to improve competitiveness, productivity in all economic sectors as well as the improvement of the standard of living of all population classes.

Source: Financial Mirror

Global real estate company opens offices in Paralimni and Protaras

THE WORLD’S biggest and fastest-growing real estate network yesterday announced the opening of its first four offices in Cyprus.

The company’s President and CEO, Tom Kunz, yesterday told the Mail that, “the island is the Mediterranean’s best kept secret. Its geographical location gives it such an advantage and it’s an excellent example of globalisation having increasing demand for properties coming from overseas. I believe Century 21 will facilitate this expansion in providing the platform for bridging into these international markets, providing the utmost in value and support to the new offices in Cyprus. We wish these new offices great success in their operations and we’re proud to welcome them to the Century 21 family.”

The first four offices will be located in Nicosia, Limassol, Protaras and Paralimni, with plans for 21 offices over the next three years.

The company was established in 1971, with a recent US survey finding the brand to be the most recognised name in real estate.

Annual profits in the United States amount to four billion dollars.

Frank Clarke, head of the French division, which was the first set up in Europe, stated: “It’s appropriate that we’re in Cyprus, in a little corner of heaven. There is a strong argument for attracting a lot of people to the island, which has always been a country of change.”Extracted from the Cyprus Mail.Comment: It is interesting to note that this global real estate brand has chosen to launch 50% of its initial offcies in the Paralimni/Protaras growth region, which we at InvestinCyprus.com have targeted as one of the two major areas on the island to invest in.