Party over for Cyprus?

In recent years Cyprus has been seen as a country that has enjoyed a property boom for some very good reasons. Apart from the obvious climatic and scenic elements that provided sunshine, beaches and culture for tourists to enjoy, the market has also enjoy the dual boosts of Cyprus first joining the European Union in 2004 and the prospect (made reality since January 1st this year) of the euro being adopted as the national currency. With talks in progress over a possible ending of the semi-official division of the island between the Greek south and the Turkish north that has existed since 1974, there may be a prospect that the north can join in with all this in the future.

Yet despite this and the fact that prices continued to rise last year when others were beginning to creak under the credit crunch, there has now been a demonstrable reduction in purchases. Last week the Cyprus Land registry revealed that three had been a year-on-year dip in sales in the first quarter of 2008 amounting to 17 per cent of value and 21 per cent in total numbers of properties, , the Financial Mirror reported.

The extent to which this was down to the overseas buyer market slowing was revealed in a separate article by the same paper. While the total fall in sales was to 4143 from 5202 in this time, the foreign buyer aspect accounted for a drop from 505 to 446, or 11.7 per cent.

Set side-by-side, these indicate that while the credit crunch may indeed be having some impact on the market, the decline in the overseas demand for those wanting to invest in property was little more than half the overall drop.

In this context, it is worth bearing in mind that Cyprus property remains high on the list of popular destinations for overseas UK buy-to-let investors. This week Homes Worldwide revealed that a Jet-to-let survey had shown many investors looking to concentrate on overseas purchases, with over 50 per cent of all investors looking to buy abroad at some time, 35.8 per cent keen to do so within the next year and, most significantly in this context, Cyprus remaining the leading destination ahead of France and Spain.

Given that the latter two countries are the established big players when it comes to property buying, it may well be fairly assumed that their higher numbers compared to Cyprus are down to more people buying for lifestyle and not investment. Therefore, while the inevitable arrival of the credit crunch has dented even the Cypriot market, it may fairly be said on the basis of the Jet-to-let survey that there is still plenty of interest in buy-to-let investment there.

Jim Barnaby is a real estate investment broker and successful property investment adviser delivering research and selected UK and overseas property investment solutions with experience in spanish properties, french property investment, German property, Cyprus holiday homes, Property in Cape Verde, German property investment, cape verde property buy to let property.