Buying investment property in North Cyprus is becoming increasingly popular for overseas property investors, and several reasons for this boom in investment can be identified, reasons that go beyond explaining the interest of individual buyers purchasing investment property and make clear the surge in property development by companies eager to cement their position in the rejuvenated North Cyprus property market early.
The backdrop against which the current boom in both property and land values, along with the number of investors being attracted to the North Cyprus property market, should be explained is the revived push toward reunification that the election of Demetris Christofias to the presidency of the Greek Cypriot Republic of Cyprus this February.
House prices in Northern Cyprus – which has been separated from the southern Republic of Cyprus since the Turkish military intervention of 1974 – are far far lower than those in the rest of Cyprus and lower still than those in other popular holiday destinations where investment in overseas property has followed the holiday makers.
The disparity in prices is largely due to the division in the island, a division which has limited the trade and development opportunities that have been attracted to the island, thus constraining property prices as well as every other aspect of the cost of living in North Cyprus – a cost which is extremely favourable to those people not looking to purchase an investment property but rather to buy their dream second, or even retirement home.
With reunification house prices between the disparate property markets of the Republic of Cyprus and Northern Cyprus will consolidate, meaning that property in Northern Cyprus currently valued at, on average for a two bedded villa, around £110,000, will shoot upward to approach those house prices on the same island – but just the other side of the Green Line – which are, on average, almost double those in the North. What this means for property investors is that North Cyprus property investments stand out against the stalling, matured markets that characterise Europe generally.
Not only that but the North Cyprus property market specifically stands out to investors from the UK, as property in North Cyprus is purchased in pound Sterling as opposed to the Euro. For investors thinking about making an overseas property investment this is a huge boon, as the exchange rates have not be too kind for those purchasing Euros for pounds for a little while now.
Of course, rising property prices are not entirely reliant on reunification, although it is undeniable that investors wishing to see the steepest returns on their investment will do so in a post reunification Cyprus. The general attitude to the current round of reunification talks is that the poses the best chance yet for the island to reunify.
Only this week the immediate possibility of a reunified island cane to the fore of the news when the Greek Cypriot Minister for Commerce, Industry and Tourism, Antonis Paschalides commented on the initiation of attempts to find natural gas reserves – reportedly by 2012 – and how this endeavour reflected on the diplomatic attempts between Northern Cyprus and the Republic of Cyprus.
Far from adversely affecting the talks, I believe that the off shore issue could facilitate the negotiation process, since any future hydrocarbon discoveries will have a positive effect on the country’s economy and consequently on the people of Cyprus as a whole, Paschalides said.
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