CHAPTER THIRTEEN: Property Investing in Cyprus

Cyprus is a land of beaches, mountains, castles and villages, with a real sense of days gone by. With its perfect climate, stunning beaches and rich heritage it is a prime holiday destination, with tourist facilities to suit everyone. The country has influences from North Africa, the Middle East and south-eastern Europe, having been used as a stepping stone by a host of peoples and cultures. Its intriguing history, wrapped up with mythology, has created a unique culture with its own characteristic traditions and customs. From sandy beaches to unspoilt villages sitting amongst extensive vineyards, fertile orchards to pine forests, Cyprus is also strikingly beautiful, which is partly the reason that the country’s economy is almost completely reliant on tourism.

Cyprus is divided between the internationally recognised ‘Republic of Cyprus’ and the ‘Turkish Republic of Northern Cyprus’ (TRNC), the Turkish-occupied area north of the ‘green line’. Political instability in the region means that the tourist market fluctuates frequently, and there is still a ‘front line’, which, contrary to expectations, has proved to be a draw for tourists instead of a negative factor. GDP growth in the Republic of Cyprus was at 3.8% in 2005, whilst in the TRNC, fuelled by economic growth and reduced unemployment, GDP growth stood at 15.4% at the end of 2004. There are opportunities for investment in the TRNC, however the risk is currently too high to be considered in detail here. This chapter will therefore deal with investment in the Republic of Cyprus (hereafter just…