Ghost of a new financial crisis in Europe forces foreign citizens to minimize their potential financial risks. Primarily it is expressed in the investment of assets in foreign real estate. The leading ten attractive countries in the investment aspect England, Germany, USA, etc., induce trust due their stable economy, although property in these countries requires significant financial costs.
Southern Cyprus possibly due to the recent economic problems and risks in the property market has been excluded from the list of 10 potential countries for property investment.
However, the present situation in the property market in Cyprus has developed in such a way that the customers who choose to purchase a house here, can count on a significant discount, both in the secondary and primary markets.
Retailers of property in Cyprus are somewhat reluctant to lower the prices, and overall the market suffers from lack of credit plans, receiving of which is almost impossible. However, those who are planning to pay the whole sum at once can now make profitable acquisitions in the property market in Cyprus, using the possible discounts and promotions, sometimes reaching up to 20% or even 25%.
If Republic of Cyprus attracts foreign buyers due to the economic decline, then in Northern Cyprus where the prices are still a few times lower than in South Cyprus in time of crises, buying inexpensive property is considered to be smart investment, as the prices are due to rise.
It seems that the prediction of equating prices for property in Northern and South Cyprus will turn out to be true, although perhaps not after unification of the island but due to other factors.
Economic crisis in Republic of Cyprus, unwittingly, has become one of the causes of the increased demand for real estate on the North side of the island. Media’s wide coverage of banking crisis in the south, inadvertently pushed the attention of the general public to the existence of the northern part of the island, triggering interest in the unrecognized Terra-Incognita, with very affordable property prices, education, emigration.
Significant part of the potential property buyers in Northern Cyprus had come from the south of the island. One of the main reasons is uncompetitive pricing of the property of Northern Cyprus, visa-free travel, mortgage loans for when acquiring property, without the bank participation. If in Republic of Cyprus newly built average apartments can be purchased for 100,000 Euros, in the North similar apartments will cost half the price. The difference in the cost of small townhouses is up to 100,000 Euros and villas differentiate in price by as much as 50%.
Property buyers in South Cyprus who invest over 300,000 Euro have the right to apply for a residence permit. In Northern Cyprus residence permit is offered to all home owners, regardless of the price, location, whether the property was purchased with loan or not.
The big argument for the North Cyprus property buyers is the possibility of obtaining loan to purchase a property from the developer, while in South Cyprus to acquire a loan is almost impossible. However, loans in Northern Cyprus are offered for only new properties, resale housing in Northern Cyprus requires 100% payment.
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