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September 29,2008
 Cyprus and its once-hostile neighbour, the Turkish Republic of Northern Cyprus, seem intent on reunification. On property patrol both sides of the border, Ginetta Vedrickas looks first at the south, home to some 80,000 Britons
Stepping on to the blazing tarmac at Paphos airport after a washed-out British summer, the relief is immense. Cyprus, boasting 340 days of sunshine a year, has long been a haven for holidaymakers and, more recently, buyers who love its sun, sea and sand and the familiarity that comes from its British colonial legacy.
Cyprus and its once-hostile neighbour, the Turkish Republic of Northern Cyprus, seem intent on reunification. On property patrol both sides of the border, Ginetta Vedrickas looks first at the south, home to some 80,000 Britons
Stepping on to the blazing tarmac at Paphos airport after a washed-out British summer, the relief is immense. Cyprus, boasting 340 days of sunshine a year, has long been a haven for holidaymakers and, more recently, buyers who love its sun, sea and sand and the familiarity that comes from its British colonial legacy.
Just the place to drop the anchor: Latchi harbour in the south
The traumatic division of the island sparked by the Turkish invasion in 1974 still casts a shadow. But even that may soon pass, as there appears to be a genuine will to reunite the Republic of Cyprus - the "Greek" part, which joined the European Union in 2004 - with the pariah Turkish Republic of Northern Cyprus.
An estimated 80,000 Britons now own homes in the larger, southern part - more than 15,000 of them bought through Leptos Estates, which has built 150 developments since 1961. Leptos manager Anita Hopkins says that there is no single draw which attracts buyers: "It's just very comfortable. You get off the plane and it's not the food, culture or beauty but the whole thing - Cyprus really does have it all."
About 40,000 investors have bought in the Paphos region in the south-west. Beloved by the British, it even boasts branches of M&S and Debenhams, but Russian visitors have been growing by 30 per cent annually.
Since Cyprus joined the EU, wealthy buyers have rushed to enjoy a low tax regime, no inheritance tax and exemptions from overseas interests and dividends.
Russian buyers are propping up capital growth of 7-10 per cent depending on property type, but the British market is faltering, thanks to the unhelpful euro exchange rate, says Sakis Hadjialexandrou, of Leptos. Frontline coastal positions are increasingly rare but Leptos recently launched villas at Sea Caves in Peyia, a secluded location not far from the sweeping beach at Lara Bay, where turtles come to lay their eggs. Prices start at £605,000.
On the lesser known north-west coast, Polis, Latchi and Argaka attract buyers seeking a more tranquil lifestyle and potential price growth. This area has a planned golf course, an international marina at Latchi and a new motorway which will slice 20 minutes off the 45-minute drive to Paphos airport.
Leptos's Polis Beach Villas have Mediterranean views and have soared in value from £275,000 at their launch eight months ago to £390,000, an increase of 40 per cent. Close to Latchi Marina and the Akamas National Park, the first phase of eight villas sold mainly to Russian buyers and demand is expected to be high for the final six large seafront villas priced at £1.77?million.
Thanks to several years of growth, property under £80,000 is a rarity. The cost of living still compares favourably with the UK, but the strength of the euro means that many buyers have been priced out of the market.
Such factors may persuade some to consider house-hunting north of the border. Isolated by the international community, which does not yet recognise the state, the Turkish Republic of Northern Cyprus has not enjoyed the prosperity of the south and, inevitably, property is cheaper.
However, Martin Pearce, UK director for Aristo, which has been building in the south for 25 years, urges caution. "We've all heard the negative publicity surrounding the north, where there can be a problem with title."
Everyone has tales of property and land lost since the Turkish invasion and the resulting division of the capital, Nicosia. Progress to resolve the situation has been slow, but there are signs that the island may be inching closer to reunification. In April this year, the barrier dividing Nicosia's main shopping street was removed, allowing anyone with ID to cross the border.
Since the beginning of this month, the president of Cyprus, Demetris Christofias, and Turkish Cypriot leader Mehmet Ali Talat have been meeting every week to try to thrash out a formula for reunification, which could even come this year.
When and if that happens, the market in Northern Cyprus will really open up.
Retired watchmaker Derek Wallis and his wife, Penny, from Stirling, paid £275,000 last year for a three-bedroom villa at Polis Beach Villas at Polis Chrysochous, a 30-minute drive from Paphos.
Dream come true: Derek and Penny Wallis bought at Polis Beach
"It is a dream come true for us to have a beautiful detached villa on the coast with our own swimming pool," says Penny. "Derek and I had had enough of the British weather, a rising crime rate and the ever increasing cost of living."
Up until retirement, Derek and Penny holidayed annually in the Paphos area and in 2007 they started searching seriously for their ideal home.
"We went around lots of properties in Paphos town and the surrounding areas. Polis is much quieter than Paphos, but you still have all the amenities you could want. We like to come down to Latchi harbour for a drink or a meal and just soak up the sun and the scenery.
"I can't think of a single thing we don't like," says Penny. "Time just seems to fly. We're probably busier now than when we were working."
The tranquil north beckons - but buyers beware, warns Ginetta Vedrickas
Unbiased information on the Turkish Republic of Northern Cyprus (TRNC) - or occupied Cyprus, depending on your viewpoint - is hard to find but a visit reveals a land of contrasts. A short drive from Larnaca takes you to the border, where visas are promptly stamped. Passing military camps showing little sign of the 40,000 troops said to be stationed here, there is plenty to explore - not least a largely unspoiled coastline.
The lack of development may have preserved this part of the island, while a dearth of mortgages has also suppressed the market, but developers are now moving in. If reunification comes, Ercan airport will be able to receive direct flights from the UK.
Russell Price, of Property International, hopes that the political momentum will encourage buyers. "Property prices and rental yields are set to soar as steps towards reunification of the island are taken," he says.
The north has little of the glitz of the south. "People who come here want peace and quiet and there's so much natural beauty to discover," says Price. He admits that there is land - in Kyrenia, especially - where title is uncertain.
At The Palms, a resort on the east coast near Bogaz, Price has sold four apartment blocks and 18 of the 25 villas to British and Irish buyers. Furnished one-bedroom apartments start at £65,193 and rise to £240,000 for spacious five-bedroom villas with private pools, roof terraces, and a two-year 6 per cent rental guarantee.
The Palms is a joint venture with local partners CMC, which has, crucially, owned the land since before 1974, and Price warns that this is the key factor that investors should look for.
John Howell, of the International Law Partnership, says: "You should only buy property with a legal title that can be traced back before 1974 and which will therefore be recognised as such both in the TRNC and in the south."
Up to 4,000 Britons are estimated to live in Northern Cyprus - hardly surprising when you see the prices. The London-based agent North Cyprus International is selling new studio flats in Bogaz off-plan for £25,000.
The minister for tourism, Erdogan Sanlidag, awaits the day when the island is united. "This is a very safe and beautiful country," he says. "If we solve the problem, it will be good for both sides."
Stella plans ahead
Stella Donnelly, 61, from Manchester, paid £60,000 for a three-bedroom apartment at The Palms, near Bogaz. "I've bought here because I think that when the border is fully down, prices in the north will catch up with the south - and it will be sooner than people think."
Stella had no concerns over disputed title: "As long as you know that the land was owned pre-1974, then there's no problem."
As an early investor, Stella received a discount on her flat. "Compared with other developments, this was excellent value. The build quality is good and it's not far to the beach.
"I was a tour operator for over 20 years so I've seen lots of places, but this is very unspoiled, and not overrun with resorts like some parts of the south."
Source: http://www.telegraph.co.uk/ |
