Cypriot economy set to benefit from overseas property buyers

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New research suggests that property prices in Cyrus dropped in the first quarter of 2012 as a result of rising unemployment and limited local demand.

The latest figures from the Royal Institute of Chartered Surveyors (RICS) show that Cyprus experienced a “disappointing” drop in property prices during the first three months of 2012.

With falling property prices, property investors have an opportunity to purchase bargain properties on the island, which has just applied to withdraw from the EU.

The RICS’ Cyprus report explained: “The Property Price Index has recorded a disappointing behaviour in property prices across Cyprus’ major urban areas, with prices and rents falling across all districts.”

In the first quarter of 2012, the report showed that the value of residential houses on the island dropped by 2.4%, while the price of apartments dropped 2.6% in the same period.

The region of Limassol experienced the sharpest drop, with prices falling for flats by 6.5% and for houses a drop of 5.2% occurred in only three months.

Over the past twelve months the price of apartments has fallen by 10.8% in Cyprus, while a drop of 6.3% hit house prices over the same duration.

The RICS report also stated: “All asset classes and geographies continue to be affected, with areas that had dropped the most early on in the property cycle now nearing the trough.”

Pavlos Loizou, a member of the RICS board in Cyprus, commented on the sales of property in Cyprus and he claimed buyers postponed their decisions.

As a result, Loizou said: “This led to low transaction turnover and reduced interest, especially by local buyers, as they were more affected by the increase in unemployment and the decrease in credit.”

However, while demand among local citizens has dropped, interest with overseas buyers is generally quite strong.

Transferring money to Cyprus

If you are looking to invest in Cyprus, think carefully regarding how to send money abroad. Foreign currency exchange rates quoted by banks are almost always worse than the exchange rates available through specialist currency dealers.

So if you are sending money to Cyprus – which you will inevitably have to do if you are looking to make a property investment, be sure to compare the market before you buy your overseas currency.

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