The region’s high-net-worth individuals who are looking for alternative property investments outside Greek Cyprus are warned against moving their capital to neighbouring Mediterranean real estate markets.
Some property sources abroad have claimed recently that Middle East investors are now “increasingly looking to booming Turkish controlled Northern Cyprus”, where banks are outside the reach of the European Union and “new incentives” await overseas investors.
Angela Henderson, property marketing manager for Evergreen Developments, had said that the banking and property system in the north part of Cyprus, otherwise known as the Turkish Republic of Northern Cyprus (TRNC), “is safe and has no link to the South”. The company is scheduled to send representatives to Dubai this month to meet up with property investors.
However, financial analysts in the UAE warned that Northern Cyprus is not a completely safe bet for investors at the moment, as there is still uncertainty in the ownership of property in the area.
“There is much disagreement about ownership of land and property in Northern Cyprus and buyers should be certain of their rights before jumping at property there,” advised Steve Gregory, managing partner at Holborn Assets.
Gregory noted that there is a protracted rift between Greece and Turkey over Cyprus. “Greece and Turkey have quarrelled over Cyprus for almost four decades. Greek Cyprus got the Euro and Turkey was delayed the opportunity of joining up,” he said.
Instead of putting their money in real estate, those who have spare capital might do well if they look at other investments.
“When we look at investments in Europe, it seems clear to me that listed companies continue to do what they do well, which is create profits and pay dividends to shareholders, whether quoted in Europe or on any other exchange in the world,” said Gregory.
“Personally, I would rather buy shares on the German Frankfurt exchange than the Greek Athens exchange, but history tells us that the Athens exchange has fallen the most and has the larger potential for gains,” he added.
In a press release sent to Gulf News, Evergreen Developments from Cyprus claimed there is a shift in investor interest to TRNC, where property values are rising and bank interest rates hovering around 9.5 per cent for overseas investors.
Enquiries for one major property there has reportedly increased by 300 per cent and Evergreen Developments have noticed a 350 per cent increase in sales.
British expatriate banker James Swanson, product development and marketing manager at the local Near East Bank, said they recorded a 24 per cent growth last year. He added that there is currently £2 billion worth of expatriate investments in South Cyprus banks and they are “putting in place new incentives” to attract foreign investors.
