Prior to the Republic of Cyprus joining the European Union in May 2004, foreign nationals were restricted in the number of investment properties they could own and currency exchange controls made life difficult for investors. However accession in the Union has now removed all of these hurdles to European citizens and the islands property market is starting to take off, albeit with some sensible planning control in place.

Cyprus has long been popular with the British, primarily for holidays, but the last ten years has seen a dramatic rise in the number of families buying for investment on the island. Cyprus is now home to thousands of European ex-pats, all of whom enjoy a low cost of living coupled with low taxation and almost non existent crime rate. However possibly the most important consideration for Brits is that the legal system is based upon the UK and some 75% of Cypriots speak English.

Although Cyprus is still thought of as a retirement market improved communications are allowing younger families to spend more and more time on the island whilst still keeping in touch with their business back home and this has lead some resort communities constructing business centers within their developments. It is important to remember that Cyprus is an all year round resort with an average of 320 days of sunshine per year.

Because Cyprus recognizes British Trusts it was originally set to benefit the most from Gordon Brown’s proposed SIPP’s program. However following the Governments U-turn in disallowing residential property from self administered pension funds there is some relief on the island that the local market will now develop without experiencing an unsustainable boom cycle. Nevertheless, property prices have risen by 18% over the last year and within the prospect of Cyprus joining the European monetary system in 2008, experts are predicting a large jump in the investment property prices of quality developments on the island.

Based upon economic data complied by Price Waterhouse Coopers, A PLACE IN THE SUN’S producers put together a formula for growth based on properties that were either under or overvalued as well as allowing for the potential of rental income based over the next ten years which shows a 188% return for Cyprus.

To further back these predictions and to underline the value of the overseas property market a new study by Barclay’s Bank shows that the number of Britons who own a property abroad is set to double in coming years. The study shows that 2.2 million Brits already own property abroad and a further 2.2 million are certain of buying abroad in the future. These conclusions are based on a survey in which 5 % of the sample claims to already own property abroad, 5 % state that they intend to buy, and 37% state that they are considering buying. For reasons already stated, Cyprus stands to benefit from this continued interest in oversea property purchase.

A large proportion of visitors, permanent resident and investors are drawn towards the costal town of Paphos and with a major investment in infrastructure due to commence shortly this is seen as the new “hotspot” of the island. To allow for this expansion a luxury marina is to be built near Coral Bay along with a rejuvenation project for the old Paphos Harbor and major beach improvements. Also included is a $1 billion mixed-use development. The very first site, which is to be known as “Neapolis” will include a new hospital, private university, research and development center, office park and international business center, plus a wide range of cultural and leisure facilities. Located in the hub of Paphos within the Geroskipou Municipality, 800 meters from the beach and approximately two kilometers from the town centre it is predicted that the socio-economic benefits of this multi-million pound development will create thousands of new jobs on the island. This is in line with the stated aim of the Cypriot Government to develop the island as an international business centre while reducing the dependence on traditional tourism, and attracting wider numbers of visitors by offering state-of-the-art educational and medical facilities.