Cyprus is quite attractive for the Russian real estate investors and this came about for many reasons. The very good relations that the two countries have, since 40 years ago, the same religion, the most favorable (for Cyprus) double taxation treaty with Russia, the existing low taxation system in Cyprus, the regular flights and a strong tourist number (120,000 pa) which is ever increasing, are the main pluses.
The Russians' favorite place of living-investment is the seaside town of Limassol, which practically attracts 60% of all Russian investors / livers. The town's cosmopolitan environment, with its numerous luxurious hotels, the existence of a Russian church and schools, as well as the English speaking ones, facilitate the Russians to live mainly in Limassol, which is also the center of the offshore business.
In terms of the real estate market buys, the Russians can be divided mainly in three broad categories. The very top end with a budget of around £ 1 mil.- £ 3.0 mil. (EUR1.7 mil.- EUR5.1 mil.) Whose interest is directed primarily for right on the beach property. This price range refers to luxurious accommodation with parking, garden and pool, 4-5 bedrooms and having an extent of around 400-600 sq.mts.
The second category is that of the £ 300- £ 400,000 (EUR510,000-EUR680,000) which direct their interest for villas situated on hills, offering attractive sea views, or property very near the beach. This price range refers to villas with private gardens and pools, 3 bedroom-4 bedroom around 120-150 sq.mts. The third category is around £ 200,000 (EUR340,000) whose interest is mainly for apartments, having approximately 130-150 sq.mts., Of a 3 bedroom capacity.
The Russian market deviates considerably and there are sales at around £ 7.0 mil. for homes (very limited) and buyers also for lower priced units (around £ 150,000). The prices quoted above mainly refer to new accommodation, with second hand units priced at around 20% -25% less. A number of Russian investors have teamed up with local business people and have undertaken property development, whereas others are buying land as an investment.
Opportunities for investment in the market are there and the Cyprus real estate market has shown an annual appreciation in terms of land of around 12% pa, projected to continue at the rate of 10% -12% pa over the next few years. Similarly increases are expected for house / apartments, with a recorded annual increase of 10% over the recent years, with a projected appreciation of around 7% -8% pa Beach land and beach units are expected to show a higher appreciation than inland properties, due to the shortage of beach land.
For the "serious" (in terms of cash) investors, Cyprus is now offering added real estate market opportunities. There are 3 marinas at the stage of tenders and in addition to the marina development, these projects include extensive building development.
Also the Larnaca Port will have a building development of at around 200,000 sq.mts., In addition to the cruise port and marina (tenders are under consideration). At the same time, there are at present 6 golf courses which have received an initial permit issue, and each golf course will include building development of around 100,000 sq.mts. of buildings for sale. All these projects require extensive private equity, whereas, others, could be sold outright for a profit, as on paper projects once the final permit is obtained. These projects are most suitable for an extended cash investor and they are directed mainly towards the foreign market.
Although the second home is a competitive market, Cyprus attracts a total value of real estate sales to a figure of approximately £ 700 mil. pa According to the Central Bank the main buyers are British, with a 7% buyers from the total from Russia (but of a much higher budget).
In terms of statistical information the following table may be quite useful.
Foreign People Buying in Cyprus% of demand in terms of location
Russian Buyers and others by location (main players)
PAPHOS LIMASSOL LARNACA FAMAGUSTA
British 50% 20% 15% 15%
Germans 10% 90% — —
Russian 20% 60% * 10% 10%
* In terms of business people the percentage is around 80%.
As an indication of sales prices for new accommodation for which the Russian market directs itself, we hereby provide the following "
- PRICES VILLAS ON BEACH VILLAS OFF BEACH APTS ON BEACH APTS OFF BEACH
- Limassol £ 5,000 / sq.m. £ 2.200 / sq.m. £ 4,000 / sq.m. £ 1.500 / sq.m.
- Paphos £ 4.500 / sq.m. £ 2.500 / sq.m. £ —– £ 1.400 / sq.m.
- Larnaca £ 3.500 / sq.m. £ 2.000 / sq.m. £ 3.000 / sq.m. £ 1.200 / sq.m.
- Famagusta £ 3,000 / sq.m. £ 2.000 / sq.m. £ —– £ 1.400 / sq.m.
In terms of living, Famagusta region has the best beaches, but its touristic season is limited to 4-6 months, whereas Paphos and Limassol it is all the year round, with Larnaca region having a summer period (for outside the town) of around 6 months.
The market is changing and the described projects / competition will cause numerous local potential developers to seek cooperation / incoming investors from abroad. To the plusses of the island, the two new airports, now under development, as well as the constant infrastructure improvement must be noted.