Cost of Buying a Property in Cyprus
Cyprus has a flourishing property market, particularly since joining the European Union in 2004.
Foreign buyers, especially British retirees, have traditionally been attracted to Cyprus because of the relatively low cost of property compared with many other European countries. This is still the case, although prices have risen faster since 2000.
On average, prices are around 40 per cent lower than in Spain and around 50 per cent lower than in France. It’s still possible to find older village homes and newer properties at relatively reasonable prices.
Property values generally increased in line with inflation up to around 1999. Since 2000, prices have increased faster than inflation and the property market experienced something of a boom in anticipation of the island’s EU membership. Prices have seen average increases of around 15 per cent per year since then, although prices in many resort areas and new developments have risen annually by as much as 50 per cent. In early 2002, a detached house in Paphos, a popular area with British buyers, sold for around CY£98,000 (€ 165,000). In 2005, a similar house could have been sold for twice that price, depending on the location.
The market prices have been constantly rising since 2004. The decline of property prices, as experienced during the worldwide economy crisis, is now slowing down every month. For 2010 again a massive demand for property is predicted.
Despite increases during the last decade, a slice of the good life in Cyprus doesn’t have to cost a fortune, with old village homes available from as little as €100,000, modern apartments from around €130,000 and fairly large detached villas from around €430,000 depending on the location. (Prices in some of the more popular resort areas, especially in Paphos and on the golf resorts, are considerably higher.)
If you’re seeking a substantial home with a sizeable plot and a swimming pool, you will usually need to spend over €600,000 (depending on the area). The prices in Nicosia can exceed this amount considerably whereas in other areas it is possible to find a reasonably big house with swimmingpool for much less than €600,000.
If you’re planning to buy a property in Cyprus, you should take into account any legal fees and taxes, such as transfer fees, property tax, stamp duty and registration of the mortgage, if you have one. These usually amount to around 11 per cent of the purchase price. Don’t forget that if and when you sell your property you will need to recover all the above costs.
For many Cypriots, owning land and their own home is high on the list of priorities, so Cypriot home ownership is fairly high. Generally, locals don’t buy and sell for profit and consider property less as a financial investment and more of an investment in their family’s future. Property is often kept in the family once it has been purchased and some people buy extra land to pass on to their children so that they in turn can build their own property.
You shouldn’t expect to make a quick profit when buying property in Cyprus, although more and more agents are now offering what they call ‘investment possibilities’ because of the increasingly healthy property market. It’s usually wiser to do as the Cypriots do: look upon a property as an investment in your family’s future happiness, rather than merely in financial terms.