I have read a few postings regarding North Cyprus and the general consensus is that it is very risky to invest there because of the North/South divide. However, peace talks have resumed again and if we assume that a peace deal is agreed and the embargos are lifted then does everyone agree that there would be huge capital gains ? In my opinion North Cyprus property is not overpriced for what you actually receive eg: Quality 2 bedroom flats with communal pool for 39,000 GBP. But once you consider the political issues then it seems risky but I am considering starting a residential portfolio in the North (10% yields on apartments are possible) as I do believe that it is only a matter of time until a peace agreement is reached. There is pressure on Turkey as well as North Cyprus for the Cyprus issue to be resolved as it prevents their possible admission into the EU. Would appreciate your opinions ?

Ilhan, providing you take a 10 year view, your optimism is probably justified. However, if you take the couple of 1000 empty, new villas/apartments in Kyrenia alone, which cannot be sold due to buyers waiting for north/south integration, how long might they take to clear ? I think we underestimate the Greek antagonism, which even now is rife, with South Government figures still making imflamatory statements in the press. There seems to be little anti Greek sentiment in the North however. Why on earth the EEC allowed the South into EEC before integration is beyond me ? There are certainly nice properties on the market at bargain prices, but it will be a log haul. Who do you expect to be your tenants ?

David you are right in saying that there is a glut of properties on the market at the moment. I also agree with you that there is still a lot of bad feeling perhaps on both sides but I have seen the North develop so much over the past ten years that I feel it is not such a risky investment. I have lived and studied in the North and feel that in Famagusta there is massive potential with student lets, and in Kyrenia there is the potential for holiday lets and long term lettings from the local population as it is still difficult to obtain mortgages in the north.

Famagusta sounds a better bet. Student lets at least are local and more part of the real world! Personally I don't like holiday lets ! So if you are happy with a 10 year commitment, then it should be ok. I have friend trying to sell in Kyrenia, and they will be lucky to break even since buying about 3 years ago. The quality of the places I saw while staying in Kyrenia 3 months ago, was very good, but aimed as usual at UK ex-pats.

I think a north/south deal is the only chance any of us have of making any money out of our PS investments at Santa Marina. There seems more of a will on both sides to do a deal this time but I'm not holding my breath.
Huw