Cyprus Economic Outlook
According to PricewaterhouseCoopers, Cyprus is an attractive place for buying investment property. The strategic location of the island, its excellent climate, and the well-developed infrastructure are just a few of the advantages that give the island its edge.
What's more, a new investment law passed in July 2003 by the House of Representatives positively welcomes foreign investment, providing it doesn't have adverse environmental effects.
Part of the Euro Zone
The Greek Cypriot economy is prosperous, greatly benefiting from EU membership, and adopted the Euro by January 2008 (Source: Ministry of Finance). The Central Bank of Cyprus states that the island's economy is characterised by robust macroeconomic stability; a view supported by the favourable evaluations and comments of the European Commission, the International Monetary Fund, and other influential international organisations.
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Economic Reforms
As part of the EU accession process, the island has already benefited from many reforms, with further reforms in progress to modernise and liberalise its market- oriented economy, helping to boost its international competitiveness. Such positive market forces drive the domestic property market as well as attracting overseas companies, who will inevitably require accommodation for their workforce.
GDP 3.6 Per Annum
During the period 2000-2005, real GDP grew by an average of 3.6% per annum, according to Central Bank figures, which compares favourably with the EU average. GDP for 2006 was 3.8%. This was accompanied by full employment, low inflation of around 2.5% and the lowest personal taxes in Europe - starting at just 5% (Source: Statistical Service of Republic of Cyprus). This makes for a stable and strong economy that should be highly attractive to even the most risk- averse investors. Low interest rates of around 4% should continue to fall with the introduction of the Euro, further boosting the property market.
A Buy to Let Market
With entry into the EU, the island's previously closed buy-to-let market has opened, and the Cypriot property market has experienced strong growth, earning a place on Channel 4's list of 'Top 20 places to make money'. The programme claims that prices have rapidly risen over the last few years with increases of up to 20% per year.
Some properties in Cyprus have doubled in value and over the next ten years an average return in the region of 188% is predicted. This view is supported by the Cyprus Home Price Index, which has registered price rises of 16.65% per year over the three years since its introduction. "
Sustained Growth
In conclusion, Cyprus promises both capital growth and good rental yields, and despite the substantial price increases over the past couple of years, property is still comparatively cheap. With the adoption of the Euro and considerable government and EU investment still to come, the signs are strong for both economic and tourism growth, making Cyprus a very attractive property investment.
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