Cyprus has been attracting entrepreneurs interested in alternative investments for quite some time now. The most noteworthy part of this interest is its steady surge throughout the last decade.
Property demand from well-off buyers is on the rise, whether it involves the purchase of top-notch houses or business edifices. Others, mostly from abroad, seek in Cyprus different sort of investment, mainly hotels, which are, for obvious reasons the most popular option, due to the touristic industry’s excellent prospects and steady increase in the number of people visiting the island.
In fact, real estate demand is anticipated to become more apparent during 2018, since hotel investments have a return of approximately 10% of the cost/value. In addition, hotel titleholders seem rather eager to sell and lease back their businesses for a time span of at least a decade with an assured average income of 6-8-%.
In cases the hotel is top-notch quality, and considering the imminent value raise and depending on the terms of the agreement, such returns are more than favourable, especially after taking into account that deposits abroad seldom exceed a 1% p.a.
Still, investors may be interested in entirely different sectors, from fish farms and restaurants to cultivable land and agriculture, from all around the globe, including Russia, Israel, China, North and South America, even Australia.
Furthermore, further, potential can be seen in the gambling industry, namely projects regarding the construction of a casino – a development that will rise Cyprus to fresh eminence and new financial heights. In fact, the current Ayia Napa Marina has already attracted the interest of Arab investors.
Of course, caution and diligence are of the essence, especially after considering the lingering unresolved political issue with the occupied territories. On the other hand, ignoring such positive sights and being intimidated by an issue that hasn’t provoked major anomalies for the last fifty years would also prove unwise. The key lies in sober research and accurate information.
Another issue requiring our attention is the possible revoke or emendation of the passports and visa measures, which lay the foundation of the regrowth of the property market since the European Union has issued some related warnings, while the 19% VAT on building land must also be taken into account.
In an effort to drop their NPLs, banking institutions have assigned international companies with the task, striving to get rid of real estate burdening their books. Such moves will undoubtedly have an impact on the local property market in case it proves indeed positive and successful for the balance sheets of the banks involved. Hence, regardless of the euphoria diffused among real estate investors, which is indeed sound and well-based on solid data and steady long-term developments, it will be interesting indeed to see how things will develop over the coming decade.
Still, reckless moves always get investors in trouble, but Cyprus, especially in the broader area of the Ayia Napa, offers excellent opportunities to foreign investors interested in making sound and knowledgeable real estate investments.