The Cyprus property market continues to grow at an unprecedented rate and shows no signs of slowing down in the near future. Buyers continue to buy luxury villas and apartments in Cyprus almost as fast as developers are churning them out. It seems that everyone wants to own a holiday home in the sun or cash in on the huge profits that property in Cyprus has generated in recent years. The good news for anyone who owns a property in Cyprus is that he can still find some great real estate deals if he is prepared to do a little research and isn’t shy about making a bargain for himself.
Despite attempts by the Cyprus authorities to curb this real estate bonanza, including introducing VAT on the purchase price of property and limiting the proportion of value that banks can lend to 60%, there is no recession. The developers seem to have gotten around the 60% rule somehow and several are offering 20% deposit deals. It is likely that they have obtained mortgage agreements outside of Cyprus in places like Switzerland or other “offshore” places. With low interest rates on such loans, Cyprus property developers have no problem attracting keen buyers from across Europe.
Some companies have even offered buyers a two-year, 20% free deal on certain “off-plan” projects. The value of these properties is expected to increase substantially before development is complete and the remaining 80% matures. Hopefully, Cyprus property speculators would sell at a nice profit and move on to the next development. These developments could be the most convenient way for potential holiday home owners to purchase that dream villa or apartment in Cyprus they have been looking for.
This is not the way a property purchase in Cyprus is normally carried out, so anyone considering this option should obtain all appropriate legal advice before proceeding with the signing of any contract of this nature. The traditional way of buying a house or villa in a Cyprus development is in 3 or 4 distinct phases. A holding or reservation fee of a few thousand pounds is paid to the developer to reserve the chosen plot or property. This is usually valid for 30 days, after which you are expected to pay 30% of the agreed price, otherwise you will possibly lose your deposit. The rest would then be staged at different points in the construction, such as the completion of the shell, the plastering, and the final finishes.
This system has always been good news for property developers in Cyprus, who have been able to raise funds in advance to finance a project without exposing themselves to great risk. It may interest you to know that they often don’t even pay for the land! That’s right, most of the time developers pay nothing for the land but build an agreed proportion of the houses for the land owners and their family. Ready! instant real estate millionaires all over Cyprus and developers with plenty of cash in the bank. UK homebuilders would think they were dead and gone straight to developer heaven if they could get away with the same system. The bad news for Cyprus property developers is this evolving trend from small deposits to completion. It might not be long before everyone needs to join the game just to keep up with the competition. However, good news for property buyers in Cyprus.