The Cyprus property market continues to grow at an unprecedented rate and shows no signs of slowing down in the near future. Buyers are continuing to snap up luxury Cyprus villas and apartments almost as quickly as the developers are churning them out. It seems that everyone wants to own a holiday home in the sun or to cash in on the huge profits that Cyprus property has made in the last few years. The great news for any would be Cyprus property owners is that you can still find some great real estate bargains if you are prepared to do a little research and are not shy of driving a bargain for yourself.
Despite attempts by the Cyprus authorities to slow this property bonanza down including the introduction of VAT on the property purchase price and limiting the proportion of the value banks are allowed to loan to 60% there is no downturn. The developers seem to have somehow overcome the 60% rule and several are offering deals themselves at 20% deposit. It is likely they have secured mortgage deals outside of Cyprus in places such as Switzerland or other “off shore” locations. With low rates of interest on such loans the Cyprus property developers are having no problem whatsoever of attracting enthusiastic buyers from all over Europe.
Some companies have even offered buyers a 20% down deal with nothing to pay for two years on certain “off plan” projects. The assumption being that the value of these properties will increase substantially before the development is completed and the remaining 80% becomes due. The would be Cyprus property speculators would then hopefully sell on at a nice profit and move onto the next development. These developments could be the most convenient way for prospective holiday home owners to buy that dream Cyprus villa or apartment they have been searching for.
This is not the way that property purchase in Cyprus is normally conducted so anyone considering such an option should take all the appropriate legal advice before proceeding with the signing of any contract of this nature. The traditional way to purchase a house or villa on 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 your chosen plot or property. This is usually good for 30 days after which time you would be expected to stump up 30% of the agreed price failing which you would possibly forfeit your deposit. The balance would then be staged at varying points of the construction such as the completion of the shell, plastering and final finishes.
This system has always been good news for Cyprus property developers who have been able to gather funds up front to finance a project without exposing themselves to any great risk. You may be interested to learn that often as not they don’t even pay for the land! That’s right, on most occasions the developers pay nothing for the land instead they build an agreed proportion of the houses for the land owners and their family. Hey presto! instant property millionaires all over Cyprus and developers with plenty of cash left in the bank. U.K house builders would think they had died 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 of small deposits until completion. Perhaps it may not be long before they all need to join in the game just to keep up with the competition. Good news though for buyers of Cyprus property.