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The Rough Guide to Buying Property in Cyprus

If you're expecting just another Cyprus buying guide which tells you what a jolly good idea owning a piece of Cypriot real estate really is, you've come to the wrong place.

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Aphrodite's Cyprus Buying Guide gives you some food for thought

 
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If you're seriously considering a property purchase on Aphrodite's Isle, then chances are you've already seen your share of hyperbole about the Cyprus property sales market.

Continuing to tell visitors what a perfect place to live Cyprus is, and still making wild claims of up to 20% growth per annum, these agents are further serving to alienate potential clients in a time when when potential customers are already thinking twice about every penny they spend.

And yet, despite the patent absurdity of many estate agents, there are still a surprising number of people with a serious interest in Cypriot real estate. Our Cyprus buying guide aims to give these people one or two things to think about.

The first question you need to ask yourself must be "Why am I buying?"

Although there are of course a number of variations, there are basically only three different reasons for buying a property in Cyprus, and each of them brings with it a different set of considerations for prospective buyers. So, before continuing, take a moment and pick your main reason for thinking about making a real estate purchase.

Permanent Residence     |     Holiday Home     |     Investment

Buying a permanent residence

If your plans include moving to Cyprus, the first thing you need to do is inform yourself about the place. Of course, most estate agents and overseas property companies are quick to tell you that living here is a brilliant idea, and believe it or not, it actually is, but there's really a lot more to it than that, and Cypriot life isn't for everyone.
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If this is why you're looking to buy a property in Cyprus, always remember that you are looking for a place to live; you are not merely using it part-time, nor are you looking to derive a rental income. This is an important, and all too often overlooked, point, as a great many permanent residents of luxury holiday complexes will be quick to tell you, should you ask them.

  Country villa in the fields outside Pyla village

Indeed, Paphos' Universal area is veritably bristling with holiday apartment complexes where permanent residents are irritated by noisy holiday makers almost constantly. And that's the point, you see? These sort of places are designed as holiday homes, and no matter how attractive they may look on paper, if you live there you need to put up with a continuous flood of vacationers letting off steam for a fortnight at a time. And after a while even the most saintly patience can be sorely tested by this, so you need to make sure that the properties on your shortlist are actually places where you would want to live for an extended period of time.

Allow us to briefly illustrate what we mean: Back in 2005, we sold a villa on the fringes of Pyla village to a marine engineer who was moving to the Larnaca area. After familiarising himself with the area in the company of one of our staff, he decided to purchase a property well away from the village, and backing on to the Green Line. After signing the contracts and completing the purchase, he then spent another week staying in a hotel along the Oroklini seafront, where he got talking to one of the locals one night.

Local folk being naturally curious, the discussion soon moved around to his newly purchased property and its location, with the immediate reaction being that he had made a very poor decision, and that the house was utterly unsalable. Our customer, being Newcastle born and bred, looked at the gentleman opposite him, and told him in no uncertain terms: "I don't want to sell it you fool, I want to live in it." And he still quite happily lives in his villa today, despite the fact that he is now employed by Limassol Port, and faced with a one-hour commute going to work.

Ultimately, only you know the exact kind of property for you, and the sort of environment you ideally want it located in. And only you, not your estate agent, should make the decision about whether any given home is right or wrong for you.

These are the four things to consider when searching the Cypriot property sales market for a permanent home:

  1. Carry out your own research about Cyprus and life in the Republic. Don't merely believe the first thing anyone says, either good or bad, but inform yourself through your own independent efforts.
     
  2. Think about what you consider to be your ideal home, and what sort of environment you'd like it to be set in; then take a closer look at the various towns and villages around Cyprus to compile a shortlist of localities which suit your own personal requirements.
     
  3. Carefully evaluate the homes you're looking at, who your new neighbours are, or are likely to be, and whether each property would really suit you as a permanent full-time residence.
     
  4. Be sure to make your final decision about which home to buy an informed one, based on the findings of your own personal research. You know your own requirements best, so don't be too swayed by third-party opinions.

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Sea view from the infinitiy pool of the Limni beachfront villa  

Buying a holiday home

The search for a perfect holiday home must invariably begin with a handful of very concise questions:

  1. What do you personally consider to be the perfect holiday home?
     
  2. Are you looking for a rental income from the property when you're not personally using it?
     
  3. If so, is your own personal vision of a holiday paradise likely to be popular with others?
     
  4. How much of a role is capital growth playing in your decision to buy a holiday property?

First and foremost, of course, you should consider your own personal needs and tastes. After all, there is very little point in buying a holiday home which doesn't tick the boxes on your list of preferences. It is therefore a very good idea to physically compile a list, not only of things you're looking for in your ideal holiday home, but of features and amenities you're looking for in its ideal environment. For instance, if you're looking for a villa located close to the beach and local the nightlife, then a country villa near Lara Bay will only fulfil 50% of your requirements, unless of course your idea of nightlife is watching the Mediterranean Green Turtle lay eggs on the beach.

This quite neatly brings us to the second question above: "Will you expect your holiday home to produce a rental income to help offset its cost?""

If so, then you might want to think about question three, and whether or not your idea of the perfect holiday home coincides with other peoples' vision of vacation heaven. If it doesn't, then you either have to sacrifice a few things from your list of requirements, or accept the simple fact that you're not likely to get very many rentals through the year. What's needed in cases like this is a balance, a property where you'll feel comfortable and happy when you're on holiday, but one which is also attractive for holidaymakers looking to make the most of their fortnight away.

If you get this balance right, and you don't mind renting your property to a wide range of clients from across Europe, you can still expect occupancy rates of around 40% at very healthy rates, even in the current economic climate.

Lastly, you need to think about how much capital growth you're expecting from the investment in your property during your period of ownership. Obviously no one buys property with the purpose of making a loss, but the question you have to ask yourself is how much of a gain you're actually expecting to make. At this stage any estate agent who still tries to promise you an easy 20% growth per annum should be avoided, as you want to be dealing with realistic figures, rather than fantasies, when making your calculations.

Always bear in mind that your holiday home's location, and nowadays also its developer, will have a pronounced effect on the amount of capital growth you can expect. For instance, in the Protaras area we would fully expect a high-quality 3-bedroom villa within walking distance of Pernera beach to experience a far greater percentage of capital growth during the coming twelve months than an equivalent villa near Ayia Triada beach less than two miles along the coast, although both beaches are of a very similar standard. From your point of view as the prospective buyer, it pays to put some research time into the relative popularity of the localities you're considering.

These are the four things to consider when contemplating the purchase of a holiday home in Cyprus.

  1. Your starting point should always be your own personal vision of the perfect holiday home. It may help you to make a list of features and preferred local amenities to establish exactly what kind of home would best suit you.
     
  2. From here, you need to establish whether the property will be solely for your own use, and that of your family and friends, or whether you expect to offset some of the cost through a rental income*. If so, your new holiday home must also hold an appeal for holidaymakers, otherwise this income will probably fall short of your expectations.
     
  3. Remember that your holiday home's location can and will affect the overall gains you're likely to make, and that equivalent homes near equivalent beaches just two miles apart can appreciate at vastly different rates.
     
  4. Always take a little time to research a locality you're interested in, first online, then personally when you visit Cyprus. Getting a personal feel for a place can go a long way towards pointing you in the right direction with regards to the property you're about to buy.

* One thing to consider about renting your property to holidaymakers is the extra wear and tear on its funishings and fixtures. Remember that, as with other ventures, turnover does not equal profit where holiday rentals are concerned.

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Buying an investment property

There was a time when the Cyprus property sales market was officially considered to be a small investor's dream. Those days, however, are long since gone, and nowadays bona fide prime Cyprus investment properties have become difficult to spot among the prevalent hype of estate agents out to get a sale.

And, though it is by far the most commonly cited reason amongst prospective buyers for making a property purchase in Cyprus, it is also the least valid of the three reasons for buying most of the time.

Why?

Because a purchase made purely as an investment should be in no way related to your own personal likes or dislikes; it should be an informed, calculated decision based solely on the prospect of financial gain, nothing else.

  Bunkered golfer, with golf property in the background

Would your personal likes or dislikes interfere with your decision to buy stocks and shares?

Then why is it that buyers professing a sound investment to be their only reason behind a making purchase, are letting personal preferences influence their decisions in the overwhelming majority of cases?

Making an true investment is by far the most research-intensive of the three reasons for buying a property in Cyprus. It involves getting an overview of current offers from the agencies in the field, and then conducting extensive research into the various claims made by them by yourself.

For instance, currently (Oct. 2010) our staff has unanimously voted the most potentially lucrative property investment in Aphrodite's property portfolio to be a hectare of agricultural land south of Argaka. The reason behind this vote of confidence is that Cyprus' largest finance company, together with two legendary golf course designers, is building the most anticipated golf and leisure resort in Cyprus less than a quarter of a mile from its boundaries, and that this piece of land occupies the brow of a hill which enjoys a panoramic view of the resort's beach-side course.

"In our professional opinion, we firmly believe that the value of this land will increase greatly within two to three years."

As you can see, we have now made what's known in our industry as a big claim. However, unlike most other agencies involved in Cyprus' property sales, we do not for a moment expect you to simply take us at our word. Instead, we fully expect you to go away and conduct your own research on the matter, before making the decision about whether or not this property presents a viable proposition for you.

And that decision, whatever it may be, should be made as a result of your own, personal investment situation, coupled with a shrewd assessment as to the property's realistic investment potential. It should not be made because you personally happen to like the view, or you have an opinion about Jack Nicklaus as a golf course designer.

Unless you are willing to carry out a substantial amount of your own research, and able to divorce your personal views from your decision-making about investment properties, you need to go back to the top of this page and pick one of the other two reasons for buying.

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Living in Cyprus

As you've most probably read on your travels around Cypriot property websites many times before, living in Cyprus is a brilliant idea.

But although this is undoubtedly a fact from many different perspectives, it must be remembered that the Republic of Cyprus is not some mythical land of milk and honey, where life is easy and everything comes easily. It is very much a real country, with real issues and problems which affect those living here.
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Telling you what others don't

Over the past few years there seems to have a developing trend for estate agents and overseas property companies to gloss over inconvenient facts which are of great importance to potential buyers.

During the same period of time, Aphrodite has developed a reputation for telling it as it is, and for giving our clients all the facts about Cyprus, all the time. Quite a few of these are scattered through this website, and compiled into a single section.
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