Cyprus tipped for euro boom

History was made this week in Cyprus when the central bank met to set interest rates. Not because it was for the first time, but because it was for the last.

For the record, governor Athanasios Orphanides said the three rates set, the key refinancing rate, the Lombard rate and the overnight deposit facility, would all stay as they were, the Cyprus Mail reports.

Mr Orphanides said any changes would have "no marked difference" and the monetary policy committee backed this view. Thus the curtain starts to fall on the Cypriot Pound.

New Year's Day will be a momentous one. It often is somewhere in the European Union, with 2007 seeing Bulgaria and Romania expanding the club to 27 members. 2008 will see the number of eurozone members in the union climb to 15, with Cyprus joining fellow Mediterranean island nation Malta.

The Cypriot central bank is on record as stating that this event is as momentous as it gets, saying: "Cyprus is preparing for one of the most important changes in its history." This is undoubtedly true in economic terms at least, for the central bank statement went on to add that this brought the country into an economic zone which is home to 310 million people.

While Mr Orphanides and his colleagues seek new employment, property investors should be very busy in the country, according to worldwide real estate firm Property Abroad. Director Les Calvert said that the country was already hugely popular, stating: "Cyprus has been increasing in popularity over the last year, more people are now making specific enquiries for property in Cyprus."

Part of this, he noted, was because of a financial situation which was in fact about to change: "There are still a few properties around that are free of VAT out there so people are jumping on and trying to snap up properties where they can."

Yet Mr Calvert was convinced that the country's Cypriot property scene would benefit from the euro, predicting: "When the euro comes in it will make the property market a lot more open and I expect the market to rise quite healthily."

He advised that investors would be able to make good use of "excellent" foreign currency mortgages provided by Swiss and other banks, though these were "more advantageous" for those living or at least gaining income from overseas.

Cyprus property will await the new year with interest, preparing for an economic and political future tied into the heart of Europe. For investors looking to sink their capital into property in the eurozone, a new opportunity awaits.

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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