The last three years have been tough for the Cyprus property and construction sectors with the global economic crisis impacting badly on the island's main market, the UK, and news of home-owners waiting years for title deeds doing no favours for the island's reputation.

The 2011 third quarterRoyal Institution of Chartered Surveyors (RICS) Cyprus Property Price Index report bears witness to this with prices of both houses and flats dropping 1.7% and 4.4% respectively. Additionally, year-on-year, prices of houses fell by 10.7% and flats by 6.7%.

The good news is that the government has taken some measures to try to kick start property sales through financial means. It has also taken some steps towards cleaning up the island's reputation and to promote it as a sound place to buy property.

In order to stimulate the sales of new properties, the government is abolishing and reducing VAT or property transfer fees for six months with changes coming into effect on December 2nd last year. Specifically, for buyers paying VAT on their home, transfer fees are being waived. For those who choose not to pay VAT, the transfer fees are reduced by 50%.

It is important to note that the changes only apply to the first sale of a new property and the contractual procedures must be completed within the six month period. In terms of releasing the scores of withheld title deeds, last year the government introduced a raft of measures mainly focused on lifting certain planning restrictions which had been a major cause in delaying the release of the documents.

Some progress has been made in this area but it is a slow process and there are still tens of thousands of property-owners waiting for their title deeds to be released. However, the government has at least recognised the need to take action on this important matter.

This red tape surrounding property purchase have been pointed out by Honorary President of the Cyprus Chapter of FIABCI (The International Real Estate Federation).

"There is a lot of expensive red tape associated with real estate conveyancing in Cyprus compared to other countries. It is vital that the government now and in the future becomes more flexible with bureaucracy surrounding property," he told CyprusBuyingGuide.com.

The state seems to be waking up to the need to make property conveyancing more straightforward with the aforementioned measures.

In terms of developments to watch, Neapolis Smart EcoCity in Paphos is the first 'Green City' in Cyprus and will comprise a selection of residences, assisted living homes and a health park. In addition to the health aspects of the project, the development will also include a private English-language campus university, a research and development centre, and the retail park and international business centre comprising a shopping centre, cultural park, office park and offices.

Following models in Europe and the Middle East, about 25% of energy will be generated from indigenous sources such as geothermal and solar power.

On the whole in Cyprus, there is a trend towards properties aimed at the high end of the market with Limassol Marina one example and a dozen golf courses in the pipeline.

But, while some developers are succeeding in keeping their heads above water in these trying economic times, a tour around the island will reveal many projects which have apparently been abandoned temporarily as cash has run out to complete them.

In any case, if the recent Cyprus census is anything to go by, Paphos District continues to be the most popular place in Cyprus for British expats followed by Larnaca. It is hard to predict what is around the corner in Cyprus in 2012 but, all in all, it will be an interesting year for property on the island.

Start your hunt for a home in Cyprus here…

If you’re searching for a Cypriot property, a good place to start is the Cyprus Buying Guide’s property search facility. To start your search now visit http://www.cyprusbuyingguide.com/content/cyprus-properties