Overseas investors hovering over the Cyprus property market

Overseas investors hovering over the Cyprus property market

As the ongoing Greek debacle staggers from bad to worse it seems that this is having an impact upon sentiment surrounding the Cyprus property market. Despite the fact that the two countries are in no way economically linked there is a general misconception that Cyprus eventually follows Greece. Historically there are links between the countries but this is where it ends, a fact which has frustrated many people dealing in the Cyprus property market for some time.

 So, what can we expect in the short to medium term bearing in mind that the Cyprus economy is recovering and it seems that international investors certainly have the region on their radar.

 Experts talking down the market

Experts in Cypriot property have been suggesting some areas could see house prices falling by as much as 15% as Eurozone worries continue to fill the skies. The expected variation in house price performance is also being impacted by an array of overseas investors who are keen to enter the market although seem to be hovering on the side lines at the moment. In many ways this plays into the hands of overseas investors with many non-EU citizens attracted by the potential for permanent residency and Cypriot citizenship.

 In the short to medium term it may well turn into a situation of who "blinks first" because even in a worst-case scenario and we see a fall of 15% in property prices, would they rebound from this level?

 Past problems hard to forget

Like so many of the smaller states within the European Union there have been issues associated with Cypriot property in years gone by. Indeed, for many people this is where the Greek similarity comes into play, we have also experienced political uncertainty and economic instability. In many ways the authorities have are not helped themselves in years gone by because now that the economy is back on an even keel and moving ahead, it is difficult to replace years of scepticism and concern with optimism.

 However, if you take a step back and look at the situation from a distance there is good value across many areas of the Cypriot property market. There are many incentives being introduced for overseas buyers and while some of the banks have yet to jettison their troubled properties from years gone by, there will eventually be willing buyers. This all points to a game of who moves first because eventually we will see those with more of an appetite for risk entering the market before the "expected bottom".

 Is it time to drip feed investment into the Cyprus real estate market?

 Whatever assets you are looking to invest in you will be extremely lucky to buy at the bottom and sell at the top. Therefore, if you are of the long-term opinion that the Cyprus economy will continue to recover and the political arena will be less volatile, should you really be overly concerned about a 5%, 10% or 15% swing in the short-term?

 Many of the more astute and experienced real estate investors are already starting to drip feed their funds into the Cyprus property market ensuring they have a position if the market was to turn and are in a position to buy more on further falls. The only real unknown at this moment in time is the fallout from the Greek debacle and the long-term future of not only the Eurozone but also the euro.
Would investors be so pessimistic if the Greek debacle had not been reignited?

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