Low interest rates as well as under-performing equities and bonds have seen property emerge as the more favoured option in which to invest. A low mortgage rate combined with attractive and flexible mortgage products has also contributed to this shift away from the more traditional investment options. As real estate in the UK continues to rise, the overseas property market has become more and more of inertest to the investor, whether looking to build up an investment portfolio or simply to provide an income for later life, where pensions and investments no longer provide such guarantees.

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Benefits of property for an investment
Why choose Cyprus?
Where best to invest in Cyprus?
Estimated rental returns
Notes

Benefits of property for an investment:

• Potential for capital appreciation as house prices rise.
• Income from renting out the property.
• If a significant down payment is made, say 30%, then the rental return may offset the majority of your mortgage costs - effectively making it self-funding.
• The 'gearing' effect of using a mortgage to finance the purchase can significantly increase the percentage return on actual capital invested.

Why choose Cyprus?

• Cyprus is one of the most attractive property investment markets in Europe at the present time with capital growth, depending upon the area, increasing as much as 15%-20% p.a. buying off plan and 5-8% on re-sales. This upward movement in value is expected to continue for the foreseeable future given Cyprus entry into the Euro and VAT being charged on land.
• Rental returns are around 5%-8%.
• On joining the EU in May of 2004 EU citizens who are non-resident can now purchase two housing units, this is a very significant factor, likely to lead to considerable growth in demand and rising prices.
• Being part of the EU Cyprus's appeal as a tourist destination will grow even further.
• Travel commentators continue to report that flight only tickets now out strip holiday packages to Cyprus indicating an upsurge in the holiday rental market.
• After May 2009 acquisition of property will be unlimited thus further expanding the market and thus anticipating real capital growth as a result.*
• A Company registered in any EU member state with a registered office, or management, or a branch in Cyprus can buy freely. A Company can also be set up in Cyprus to acquire multiple properties.
• Currently Corporation Tax is 10% and Capital Gains Tax 10% for Companies and opposed to 20% income tax and 20% Capital Gains Tax for individuals.
• With a legal system based on English law, the Republic of Cyprus has a western, stable, democratic government. Limited strikes and public facilities interruption.
• Ease of communication as practically everyone speaks English.
• Low crime rate (≈ 6% of the UK)
• Low cost of living and inflation rate (3.5%) and virtually no unemployment (3%)
• Good communication links and direct daily flights with most European capitals.

Where best to invest in Cyprus? Cyprus offers the investor a number of options:
	Cyprus has a healthy tourist market with more and more people choosing to use rented holiday accommodation instead of hotels and package holidays. Competitive office and accommodation prices have meant that more and more International companies are now setting up offices in Cyprus. There is healthy domestic residential letting market. Paphos and Protaras/Ayia Napa have the highest movement of tourist traffic, Paphos is a twelve-month resort whilst the eastern tourist areas shut down from November to April. Famagusta, now under Turkish military occupation is set to be returned to Greek-Cypriot control when a mutually acceptable solution to the Cyprus problem is agreed upon. With its long stretches of sandy white beach the Famagusta area, which will include Protaras, will once again become one of Cyprus leading resorts. In Paphos good areas for investment (capital growth, rental and re-sale) are Kato Paphos, Tomb of the Kings, Universal and the Peyia/Coral Bay area. In Protaras areas around Protaras, Kapparis and Pernera are good for maximising holiday lets. Areas around Paralimni and Dereynia better for 12-month rentals. For residential lettings Nicosia, Limassol and Larnaca residential districts will generate good returns, typically two/three bedroom spacious apartments with large terraces close to business and commercial centres or detached villas in the suburbs.

Estimated rental returns

This information is provided as a guide only and returns may vary from area to area. Some developers offer guaranteed rental returns for 12-24 month periods as well as a property management service.

Letting potential:

• High season from May-September estimated occupancy levels of 60%.
• Low season from October-April would recommend long-term letting where rental value would be reduced by 30-50%.

• 2-bed apartment/townhouse/cottage/villa/semi-detached with communal swimming pool ≈ EUR 103 / CYP 60 / GBP 77 per day high season
• 3 bed the same ≈ EUR 103-120 / CYP 60-70 / GBP 77-90 per day high season
• 2 or 3 bed villa with private pool ≈ EUR 222-256 / CYP 130-150 / GBP 166-191 per day high season

• 2 bed apartment ≈ EUR 512 / CYP 300 / GBP 382 (+/-) per month
• 3 bed apartment ≈ EUR 682 / CYP 400 / GBP 510 (+/-) per month
• 2 bed villa with pool ≈ EUR 853-1,023 / CYP 500-600 / GBP 637-764 (+/-) per month
• 3 bed villa with pool ≈ EUR 1,023-1,705 / CYP 600-1,000 / GBP 764-1,274 +/- per month

Notes:

1. A detached villa with a private swimming pool will have a higher rental that a detached villa without or a detached villa with a communal pool.
2. Prices cannot be guaranteed, as all rentals will vary depending on the type of equipment and furnishings in the property as well as the number of people that can be accommodated.
3. ≈ denotes approximate values.