Does this mean that Cyprus will unite and become one island?

http: / /news .bbc .co .uk /2 /hi /europe /7327866 .stm

Hi Dave

I am no expert on Cyrus reunification but I think the last comments of the article say it all:

"We still have a long way to go," said the mayor of Nicosia, Eleni Mavrou. "This is the first step. We hope many more will follow."

Noreen

I went to Cyprus on my jollies last year with my family.

We went on a little day trip out to Famagusta and were driven past Varosha on the way in and out. It was, quite simply, shocking - you have to see it to believe it.

It's an area that is, literally, frozen in time. The entire district is barricaded off and boarded up, what little you can see it delapidated beyond economic repair.

Everything is exactly as it was left on the 14th of August 1974, even down to items in shops and laundry on washing lines. Time and the weather has clearly taken their toll on what was, once, quite a vibrant place by all accounts. My impression was of a town that was waiting for its people to come back, almost like it was a DVD on pause. Very sad.

It was also quite hair-raising having a member of the Turkish army accompany us on the tour who was, very clearly, armed!

On the bright side, Famagusta itself was a very nice place to visit and the food was excellent.

I think this is a very interesting question which I believe has been discussed on the forum in the past. Having bought on the south side of the border near Famagusta I am waiting until this settlement is reached as I woudl anticipate it will lead to a boom in construction in Famagusta and regeneratioin, as always there are no guarantees in politics. But the situation between North and South seems to be moving closer and speaking to some project promoters on the North side they are as confident as ever, but they would be! It took a long time for the Northern Ireland situation to resolve itself and I think the patient investor will be rewarded. I guess the question is can money be better invested elsewhere for the time being.

I understand there is a university near Famagusta on the north side to which there is a demand for rental accomadation and so there may be potential to get the yeild on purchases now and wait for the capital uplift. The only issue is raising mortgage finance on the North side , has anyone got any experience of this ? and any views in relation to this side

Thanks

Paul

Just returned from N.Cyprus and very nice it was to for a holiday. However, as far as investment is concerned it is a definate no no, you might just as well try the Casino. There are 1000s of apartments & houses built, which remain unsold, so no chance of early capital growth. The government has halted further builds, due to the stalling of any early chance of EEC entry. These new builds were in anticipation of the boom, which will no doubt follow eventual unification. However there are still serious Greek Cypriot objections to this, with their politicians still making imflammatory statements. It could easily take another 10 years to resolve.
So if you want a cheap holiday home, buy at the current discount prices, but don't kid yourself it's a good investment for 10/15 years. By the way, almost all this building is for grey British ex pats.
We stayed with a couple who have been there for 8 years, and are happy, the Turkish Cypriots are genuinely appreciative & friendly with the Brits. However if you want to make Capital Growth, head for the new Eastern EEC countries.

Following on from the comments made to date, I tend to agree with Dave Culverhouse. The issue of the Greek Cypriots inviting bidders for Oil exploration rights near the island, and the Turkish side challenging the right of the Greeks to offer bids is an example of how far the reality of unification is away. I feel that unification is more poiltical rheotoric (heard at every Cypriot election). The issues involved in unification are extremely complex and very emotional and consequently a robust solution is some significant time away.

With regard to property purchase, there are 'bargains' to be had in the North. Extreme caution is counselled here as alot is not what it seems. I have heard stories of apparently randomly selected, independant lawyers 'batting' for the developer as opposed to their principal. Land rights and ownership issues are cloudy to say the least so very thourough due dilligence is required. As Dave says, at this point the purchases would be more for lifestyle than investment.

For information HSBC have a financial package that allows 50% funding in the North.

However, my feeling is that investment in the south of the Isalnd (whilst more expensive) will generate greater yields (Capital growth last year was 19.2% according to the buy-sell index). There are countless initiatives been taken by the Government/Cypriot Toursit Organisation and private commerce that give a 3-5 year visibility of sustainable growth in the South. The Central Bank is now reviewing its change in deposit policy (40% deposit for properties without planning permission before 22/8/07) to reduce it back to 20%. The main reason for the change was to stem inflation (interest rates are the usual instrument for this - but Euro entry in January 2008 prevented interest rates from being used) so deposits were the alternative. The deposit policy also had several knock on effects (not least of all allowing the banks to be selective in lending to 'prime' borrowers). Overall, carefully selected opportunities in the south can produce excellent results. I have seen some very good returns here over the last couple of years.

many thanks for your advice , certainly will help me remain focused on more profitable locations

Regards
Paul

I agree that any settlement to the Cyprus problem is a long way off. Despite upbeat noises from politicians if you speak to local Cypriots they are much less optimistic.

In 2004 I bought an off-plan apartment in Alsancak, near Girne in the North (that was before becoming a member of PS and reading that you shouldn't touch North Cyprus with a barge poll...woops). I have friends who are partners in a construction company over there and it was through them that I bought the place.

Since then I have actually learned a little about property investment and purchased much sounder investments elsewhere but despite the opportunity cost I can't quite regret my £45000 three bed penthouse with large swimming pool that really does have spectacular sea and mountain views.

Having furnished it, paid taxes and maintenance charges, if I had to sell tomorrow there is no way I'd get my money back. Luckily I don't so I'm going to keep it and enjoy lots of long, lazy holidays in the sun.

There is now so much unsold property in the North that if you've got a lump sum burning a hole in your pocket and fancy a holiday home somewhere beautiful, quiet, sundrenched with really friendly people you'll be able to strike an amazing deal and who knows, in 15 years from now maybe we'll even get a bit of cap growth!

Eleanor.

A very good post Eleanor, I enjoyed reading it and admire your attitude.

You have reassured me that all is not lost when you own a nice sunshine property that doesn't have a hope of making Capital Growth in the short term. To my shame I did have quite a few years of successful Property Development and Investment to my name (albeit on a relatively small scale) and was already a member of PS when I signed up to a deal in the South of the Island.

It ticked many boxes at the time - sunshine, up and coming area, joined EU, retirement and holiday destination for Brits, Tax Haven, great coastal location near Famagusta, sea views (till they build on the no-go zone) etc etc - but unfortunately like many other countries the apartments have been overdone and offplan was over-valued, so I too will probably have to sit this one out for a few years before I will see any return on this investment.

So, like you, I will look forward to many sunshine holidays - when the flights get subsidised, hopefully later this year or next. I really would like Sterling to recover a bit first though.

My hope also is that Planners all over the world realise soon that most people don't want to live in apartments.

Hi Savvy

yes, couldn't agree more about flights having just tried to book for August. Direct flights to the North would be fantastic too - sitting on a Turkish runway for an hour just doesn't do it for me.

Good luck with everything. Hope all the problems get sorted out soon.

Eleanor.