The Impact of the Euro on the Cyprus Property Market

Chris Calogirou, the managing director of real estate specialists, Best Cyprus Properties, takes a closer look at how the strength of the Euro has impacted upon the Cyprus property market.

"Since December 2007, the Euro has reached some record highs against the US Dollar and the Pound Sterling and inevitably the European property market, including Cyprus, has been affected," explains Mr. Calogirou.

On 19 December 2007, the GBP was worth almost €1.4. Three months later, it has gone down to €1.28. This is a reduction of 9.4%, which means property within the Euro zone countries has become 9.4% more expensive for the British buyer, with all other factors being equal.

"However, selling a property in Cyprus and sending the funds back to the UK as sterling would have resulted in the opposite, with buyers gaining 9.4% in extra profit," says Mr. Calogirou.

"The savvy investors who bought in Cyprus have other reasons to be happy, since, not only is it easy to invest in the Cypriot property market; all monies can be repatriated; and with the possibility of the Euro overtaking the dollar as the world’s major currency, this could mean the Euro becomes even stronger in the future."

The Cyprus market appears to have felt the impact of the weak sterling because Britons are still said to be the main buyers on the island.

"However, the Royal Institute of Chartered Surveyors recently produced their 2007 European Housing Review, which reported an almost universal downturn in European housing markets - except for Cyprus where it has actually accelerated," explains Mr. Calogirou.

"This is in part, thanks to the country's adoption of the Euro at the beginning of this year, which has increased investor confidence. In addition, developers across the island, along with private vendors, have recognised that they must cut costs, reduce profits and make prices more affordable as this was the only way the market could survive, by stabilising and weathering the economic storm, so that it could emerge stronger in the future."

Research by www.bestcyprusproperties.com, which compared prices in autumn 2007 with current prices, showed that this approach had the desired effect.

"Prices have become stable and in some cases have decreased. As a result, the Cyprus property market is more attractive to foreign investors, leaving room for growth and capital appreciation in the future," says Mr. Calogirou.

"Cyprus property continues to be a good investment and a real possibility for people who want to relocate for a different lifestyle. The fact that English is widely spoken and understood, driving is on the left hand side of the road and personal taxation is low, are just some of the reasons why people should really explore the benefits of purchasing a property in Cyprus either for investment or relocation purposes."

Information provided by Best Cyprus Properties.

Best Cyprus Properties is a real estate specialist company with over 60 years in the business.

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© PropertyIndex.com 2008 | Last Updated: 26 March 2008