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Buy Abroad News

09 Nov 09

An Analysis of the Cyprus Property Market in late 2009

2009 has seen a steady decline in British property buyers on the island of Cyprus and although buyers from other countries such as Russia and the Middle East have been coming into the market to ‘plug the gap’, there is no doubt that fewer British buyers has meant fewer sales for estate agents across Cyprus.

In this article Buy Abroad’s John Reilly assesses the current state of the housing market and highlights some important factors that are having an impact on property sales across the different regions of Cyprus.

Paphos, which is probably the most widely recognised destination in Cyprus, has a lot of property for sale at the moment and, although competition for buyers is tough, people are still buying where the price is right. In the last week of October 2009 we have sold a detached three bed villa in Peyia for €290,000 and a four bed detached house in Coral Bay for €570,000. In both cases the houses in question would have sold for considerably more a year ago, but owners have been realistic about what to expect in a tighter market and that, in turn, has enabled them to find a buyer.

To a degree, Larnaca mirrors the Paphos market at the moment with a large stock of property for sale and buyers being selective about what they want to view. When offers are made, invariably they are for at least 10% under the asking price and, more often than not, the seller is happy to negotiate if it means selling. As with Paphos, we have been able to find buyers for property especially heading out of town towards Kiti, Oroklini and Mazatos - where prices are lower than Larnaca town centre itself.

Of all the towns and regions in Cyprus, I would say that Nicosia has been least affected by the global downturn. The constant demand for quality accommodation in what is, essentially, quite a small city (compared to other European capitals) means that prices have remained steady with little upward movement. Unlike other areas of Cyprus, off plan projects are still selling where the project is central to the city of Nicosia. Investor confidence is helped by the steady demand for rental property in Nicosia - investors know that if they buy a property in areas such as Tseri, Strovolos or Latsia, for example, they are almost certain to rent it as soon as it becomes available.

Most vendors in Nicosia seem happy to hold out for the asking price, whereas in areas such as Larnaca and Paphos we have seen substantial discounts from ‘non Cypriot’ owners who are keen to repatriate their capital - particularly when they are looking to convert Euros back into Sterling. The current rate of exchange means that sellers can take a hit on the price in Euros knowing that, when they convert back to Sterling, they will get a good rate of exchange.

What of the future? Yes, sales are down on this time two years ago and buyers have become more selective, but property is still selling across Cyprus and, providing vendors are realistic about the price they are asking, there is every chance they will find a buyer, even in this tougher market. Cyprus is still one of the most popular places in which to buy a second home or as a retirement destination, not least because of its mild climate and the low crime rate. That is not set to change anytime soon.

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