North Cyprus Property will continue to be a Great Investment in 2008

North Cyprus is one of the most exciting markets in Europe for predicted property price growth in the medium term, and because politically speaking things started moving incredibly quickly at the end of 2007, 2008 could be one of the last years for investors to bank land and properties at seriously below market prices.

Naturally discussing the political situation in Northern Cyprus one has to be incredibly sensitive – but at the same time to avoid highlighting the very real fact that North Cyprus Properties will continue to be a great investment in 2008 would be wrong… so we hope we achieve a balance in this report on the 2008 prospects for the real estate market in Northern Cyprus.

A More Permanent Solution...

In 2007 certain significant events occurred that suggest that a permanent solution to the property dispute across the whole of Cyprus could be resolved as early as 2008.  Firstly the High Court in London ruled that a Greek Cypriot court had no jurisdiction in North Cyprus and they also ruled in favour of a British family keeping former Greek Cypriot property that they had bought, taken over and redeveloped in Northern Cyprus.  Secondly the Northern Cyprus Property Commission which was established in TRNC in 2005 ruled that a former Greek Cypriot owner of properties in the North of the island should be paid compensation by Turkey for loss of access to their property and this ruling was upheld by the European Court of Human Rights.

Both of these events suggest that over the medium term any Greek Cypriots who have direct claim to properties in North Cyprus will be able to apply for compensation from the Turkish government for loss of use of their properties.  While this will not solve the issue for Turkish Cypriots who lost land and real estate in Southern Cyprus it could well put to bed the long running concern over what could happen to resolve disputed property cases in the North.

Naturally this will remove all fear that has been instilled in people that if they buy Property in North Cyprus they could be evicted from it or have to pay compensation to former owners for the use of it.

High Court Ruling for Investment...

It’s a very real fact that the High Court ruling resulted in a resurgence of serious property investment interest in Northern Cyprus from British investors which immediately boosted property prices, and it’s a very real fact that Turkey’s offer to open ports and airports to Greek Cypriot traffic in return for the opening of Ercan airport in Northern Cyprus to direct flights is a step closer to expanding the tourism industry in the North upon which a great deal of property investors will rely for rental income in the future.

Cyprus Turkish Airways have just applied to the British government to be allowed direct flights from London to Ercan and a ruling is expected on this request in 2007 with most confident that a ruling will be positive and result in a bumper summer in 2007 for North Cyprus’s travel and tourism economic sector.

The Turkish Cypriot government have put before parliament a change to inheritance tax rules in North Cyprus that should see IHT drop from 25% to 1% in 2007 in a bid to encourage greater foreign direct investment into real estate.  Add to this the fact that property companies in the North are now self-financing mortgage arrangements for customers and that it is now possible to establish a limited company in North Cyprus with 100% foreign ownership through which an individual can own multiple property units and parcels of land and you begin to get the picture that things are moving so incredibly fast towards boosting TRNC’s FDI which will in turn see property and land prices rapidly increasing.

Property is Cheaper in North...

In real terms property is still at least a third of the price in the North compared to the South and there is so much of North Cyprus that remains untouched.  The east – west corridor from Tatlisu to Lapta has been heavily targeted for development but that leaves about 90% of the rest of North Cyprus untouched.  In a bid to protect the nation from excessive building the government have just put a blanket ban on all new building permissions for multiple housing developments while they reassess which areas are nearing saturation and which are ripe for further development.  The ban will be lifted in January 2007 and developers will be given tight guidelines about what they can and cannot do.  Furthermore, environmentally speaking the government have finally realised that they cannot market mucky beaches and landfill sites that were formally attractive ravines to holiday makers.  A huge operation is underway using public and private funds as well as military assistance to clean up North Cyprus and it is staggering to see how much positive action is occurring so fast.

Finally it seems North Cyprus has awoken from its own reverie and realised that it has so much tourism potential and possibility as an attractive second home or retirement destination and it is consistently and actively doing all it can to improve the nation both physically and in terms of its attraction for investment.

Property investors considering North Cyprus have so many angles of approach.  They can land bank parcels of land, they can invest into tourism projects such as one that is seeking investment in 2007 which is a pre 1974 title deed luxury beach front hotel project, they can commission developers to construct properties that they then market, they can buy one off apartments to let to the huge international student population in North Cyprus, they can buy villas to rent out privately to tourists, they can purchase and renovate traditional properties or they can even purchase commercial or residential stock suitable for letting out or leasing to local demand or they can buy off plan and flip on to other investors of property purchasers.

North Cyprus has to be one of the most dynamic countries in Europe right now in terms of the efforts it is making to transform its country into one of the most exciting places to invest and one of the most attractive places to live or holiday and we truly, wholeheartedly believe that North Cyprus property will continue to be a great investment in 2007 and beyond.

Source: The Investment Analyst, 30 January 2007