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Published: January 2009

Sponsored by: Whiterocks

What a united Cyprus would mean for property investors

There has never been a stronger possibility of the reunification of Cyprus. The election in the Republic of Cyprus (the South) of Demetris Christofias as President has renewed hope following the rejection of the United Nations Annan Plan in 2004.

Reunification has never looked closer.

What would a unified Cyprus mean to you?

Whether you are invested in Cyprus already - South or North - or whether you are considering investing on either side of the divide, the reunification of Cyprus will have a massive impact on your investments and your decision making.

The prospect of a united Cyprus may represent the biggest politically generated opportunity for property investors since the absorption of first eight and then a further two central and Eastern European countries into the European Union.

In the latest research report from Property Secrets - the updated Cyprus Property Market Profile - we look at the prospects for a united island and what it may mean for both the economies of the North and the South and, by consequence, the property markets of each, but especially the property market in the North.

Included in the report is a brief history of the island and its split in 1974, the various attempts at a resolution since and just why there is genuine hope now.

Extract: Executive Summary

There have been many false dawns in the search for a lasting peaceful reunification of the island during the 34 years of division: many unfulfilled promises and overly optimistic prognoses.

But in 2008 a genuinely powerful opportunity to reach accord and create a solution to the problem has arisen...

...The current optimism has been created with the election in February of Demetris Christofias as President...The new President is not only in favour of reunification but he also enjoys cordial relations with the Turkish Cypriot leader, Mehmet Ali Talat. The two men have vowed to reach a settlement, possibly by as early as the end of the year.

Economic Impact & Reunification Costs

To fully understand what reunification might mean, the economic and cultural history of both sides of the divide is explored, placing into context the forecasts for growth and change.

The effect of reunification on the economies of the North and South of the island is discussed in depth, including growth predictions in various sectors, the impact on trade with Turkey, Greece and the rest of the world and, crucially, the costs.

Extract: Unification - An Unstoppable Trend

An exceptionally thorough report from the Cyprus Centre of the International Peace Research Institute, Oslo (PRIO) produced as recently as this year (2008), made some startling calculations in this regard - figures that must surely awaken the interest of any property investor.

The peace dividend is the equivalent of approximately €1.8 billion per year.

If this is translated into the annual dividend per family (household) in Cyprus, it comes to an annual peace bonus of approximately €5,500 per household per year.

This is around 20% of the current average salary in the southern part of Cyprus and an estimated 40% of the average salary in the northern part of the island.

This calculation is the least that can be expected since it focuses only on the sectors that stand most to gain.

The report concludes: "...the peace dividend calculated could be almost doubled if important regional developments, such as new business from the Baku-Ceyhan oil pipeline (€ 1.3 billion) and the implementation of the Ankara Protocol (€ 187 million per year) are taken into account."

The Property Markets

Of course, to you as a property investor, it is the potential impact on the property sector that you will be most interested in and it is here that the real opportunities - and dangers - lie.

The Cyprus Property Market Profile examines closely the subject that is sure to cause the most problems during any reunification - the issue of the land and homes that were abandoned by those who fled to both sides of the island when the Turks invaded.

Extract: Buying In The North - The Land Rights Question

"...anyone buying in the North has to consider the possibility that the previous owner of a piece of land or a property may at some point stake a legal claim on that land or property."

But, given the economic growth that is highly likely to follow any resolution, the property markets on both sides of the island will benefit and it is this that provides the opportunity for you to benefit from this anticipated growth.

The Cyprus Property Market Profile looks at the likely impact in both the North and South and analyses how you can take advantage. In addition, the question of financing any investments, North or South, is addressed, with what is available now for foreign investors highlighted.

Ultimately, if you are to consider investing in Cyprus, especially the North, you are going tobe basing your decision on two thing: likelihood of reunificaton and price. This report compares North and South prices (along with associated costs such as VAT, buying costs, property taxes and, crucially, selling costs).

The Risks

When to buy, where to buy and how to buy to take maximum advantage of the opportunity is covered in detail - as is the very real risk of "What if it doesn't happen?".

Would it be the disaster you would think it to be if you're invested in North Cyprus? Not necessarily...

For the FULL breakdown of the Cyprus opportunity you need the 53-page Cyprus Property Market Profile.

Download your copy now »