Buyers By Nationality & Historic Analysis
If one is to look back and examine the foreign nationals who buy real estate (mainly holiday homes) in Cyprus we can deduce a certain pattern of demand.
Since the 1960’s the main foreign market source was the British, with their main initial interest being Kyrenia and after the invasion the interest moved to Limassol and Paphos Districts.
In the 1970’s interest appeared from Lebanon (due to their civil war) and the gulf countries. This lasted up to the 1990’s when “riots” (of a kind) took place in Limassol, with the Arab nationals (not the Lebanese) leaving Cyprus for other destinations. The Pieris Developing Co (who discovered the Gulf states market) is notable and the Co’s downfall was another cause for the abandonment of Cyprus from this market source.
During this same period 1980 – 1990 the British market came back in force with their main interest initially being directed towards Limassol and then Pafos – Interest included also the Paralimni / Protaras area and the areas around the Bases in Limassol (Akrotiri, Kolossi and the Souni Zanadjia, Ayios Nicolaos area).
After the 1990’s the Russian (and the Russian speaking countries) started to appear with a huge initial interest (Yetlsin era), but then it slowed down differentiating down their budgets. The preferential area of this market source was/is Limassol where a vibrant community has been set up (and one thing brings another).
In the 2000 era, we have had (and still have) the Chinese and the far east market whose main interest was/is for Pafos be it that it is expanding in other towns (see recent developments regarding Chinese restrictions (with an unknown the end result).
The Cyprus real estate attraction regarding foreign buyers is due to:
• The passports/visas best scheme in relation to our competitors.
• The rather low cost of living, clean air and weather conditions. Short term increasing rentals and improving facilities/infrastructure (golf, marinas etc) also.
• Security plays a most important role, as is the lack of racism and discrimination.
• The friendly nature of (most) of the locals, as well as the wide use of the English language, makes foreigners feel “at home” both for them and their families.
• The taxation attractions, including the more recent abolition of the property tax is a huge plus.
• Most important is also the creation of foreign speaking primary/secondary schools and local universities which on most occasions are connected with U.K. quality universities with lower fees than that of U.K., but still ending up with a U.K. degree. The creation of medical schools is another major attraction, as is the recent legal battle with the E.U. (Greece etc) which ended up with the recognition of local university status attracting students and investors from abroad.
• The bail in has disappointed many foreign investors, who having lost their “cash” do not want to know Cyprus. But as time passes and memories of this fade, it seems that interest is coming back (this is shown from the increasing foreign deposits by foreigners).
• The property market situation with the lowering of prices, has provided another attraction (save the high-end properties) and for the resales the British owners / resales are offering good opportunities (as well as from locals) whereas the recent start of housing loans is another plus. Cyprus remains, however, a country isolated in terms of air connection, whereas the Cyprus political problem, although not a major issue, is there, at the back of everybody’s minds.
• What is strange (to an extent) is that Nicosia is out of the demand cycles regarding foreign buyers. Other than embassies and some foreign firms, Nicosia is the “poor relation” of the other towns.
Regrettably, there are no statistics on the number of buyers by nationality and by District, but based on our own experience, it seems that demand is mainly forthcoming from the following nationalities (not in order of volume of buyers) with the following preference.
• Russian speaking in general:
Limassol (80%) – Larnaca (10%) – Paphos (5%) – Famagusta region (5%)
Paphos: (90%) – Limassol (5%) and Famagusta (5%)
Paphos (85%) – Limassol (5%) – Larnaca (10%)
• Lebanese / Israelis:
Mainly investors and for the major towns. Seeking income producing investments (very difficult clients)
• Greeks from Greece
Nothing to speak of. Main interest is to let with short term periods due to the new taxation system in Greece.
• International tour operators
An increasing interest by international tour operators which follows the high increase in the tourist numbers and prospects. Debatable how long will this last (it depends on the Egypt/Turkey/Arab countries tourist demand).
• International investors – Real Estate
Not serious interest so far due to their expectation for high returns, as opposed to the results on ground. The banks attempt to sell off large chunks of real estate and the recent Bank of Cyprus property fund will show their interest in real estate.
• Etc etc
In ending our experience we wish to add that foreign interest is created mainly by private developing firms and it is notable with a certain developer who on its own attracted the Chinese for Paphos, whereas a Larnaca developer who is now active in the same country, is attracting high end interest from there.