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PROPERTY IN CYPRUS

 

The best location for international property investments!
 

When it comes to stable investments with a constant long term return very few options can compare with property. There is however a general misconception that the purchase of a property on mortgage over a twenty year period still falls under this category. It is an unfortunate situation that interest rates in South Africa are in the double digits. A state which causes a lot of "property investors" to have a negative real return on their property value as the interest paid on their long term mortgage together with maintenance and registration costs are all but wiping out any profits the growth of the property value might have had. For example, a property purchased at R1,3 million with a loan at 10% interest would return approximately R4 million less over a twenty year period should the prospective investor have rented the property and paid the difference on payments into an account giving a 10% return. It obviously then stands to reason that one should purchase property here in South Africa only if you are able to repay the mortgage in the shortest possible period.

There is however a way to make a mortgage on property work for you.

Most countries offer mortgages at lower rates then what we are used with and although the purchase of a property in another country might seem like a daunting task, it is actually very simple and gratifying.

 After some research it was found that Cyprus offer one of the best combinations of benefits to South Africans looking at international property investments. Not only is Cyprus the EU member with the lowest crime rate but it also has one of the more affordable property price structures in Europe. An apartment in Pafos would go for less than half the price of a similar one in Barcelona. It is also one of Europe’s most popular holiday destinations as it offers moderate climates in winter with the option of affordable skiing resorts in the mountains and long warm summers of up to 9 months. The cost of living is also very similar to that of South Africa and, best of all; mortgages can be obtained at

around 5% interest. The impact of a low interest rate together with a very lucrative holiday rental prospect creates the perfect investment opportunity. Repayments to the bank loan is almost halved and the rental income supplement can bring down the mortgage payments on a Cyprus property to as little as one fifth of what it would be in South Africa.When one takes into consideration that the value of property in Cyprus grows on a similar, if not better, rate then South African properties the negative impact of a long term loan is reversed into a significantly profitable exercise.

There is however an even bigger attraction for prospective buyers...development.Cyprus is undergoing major developments in various fields. The biggest of which is the construction of a new university as well as a large shopping centre and luxury yacht marina in Pafos. There are also plans underway for the upgrading of the Limassol harbour to accommodate tour boats and of course the new Disneyland planned to be erected by 2012 when Cyprus ascends to the Euro presidency. It is needless to mention the impact that these developments will have on local property prices. 

-SD

Contact us for more information and assistance in the field of international property.