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| Cyprus Buying Guide Newsletter |
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| Howdy How are things going for you? With the longer sunny days and with spring in the air, I’m feeling much more enthusiastic about life. And I’ve finally booked my flights to Cyprus – any chance you’ll be there at the same time? I’m flying
out on the 9th of May and returning on the 23rd. As I mentioned in my
last newsletter, if you’re interested in viewing some properties
during that time, please join me! All you need to do is fill out my
property form and put a special mention that you’d like to view
properties with me and I’ll see what I can do to make it happen!
I’ll be in both the Paphos and Famagusta/Larnaca areas during
my stay. Right – on to other matters. In this month’s newsletter, I have my usual wide range of interesting information. I’m very fortunate to have received an extremely interesting article from a solicitor in Paphos. (I’m not kidding…the article is very informative and anyone buying in Cyprus will want to read it and add it to their knowledge-bank BEFORE buying). I have another property development that looks quite interesting – this one is in Kiti Village. Dare I say that all the developments in Cyprus look good – especially when you realise that it’s 35 degrees in Cyprus and only 10 degrees in the UK! My main article is about the border opening on Ledra Street (Nicosia), my thoughts as to what the future holds for reunification and its impact on property prices. This should concern you if you have already purchased OR if you’re thinking about it but haven’t done so… And Charles Purdy,
Smart Currency Exchange, has an update as to the state of play on the
Euro (which will assist you with determining how much your property
will cost you) along with access to an exceptional report entitled ‘
Why overseas property buyers lose money... Other than that, Cyprus is warming up – as I write this it’s 27 degrees centigrade (80F). In fact, locals are a bit concerned as the temperature has gone over 30 degrees which is not normal for this time of year. There’s a bit of concern that this is just the beginning of a long HOT summer. Furthermore it’s dustier than usual… The water shortage issue is becoming a concern: from what I’ve heard Greece will be sending tankers of water and the Cyprus government is getting specialist to drill bore holes. There is a website that is suppose to explain what this means to the home-owners but it doesn’t work. And it’s impossible to get through to authorities in Nicosia…So – what does this all mean? No water? No pools? No green lawns? No green Golf Courses? I don’t know, but when I visit next month I’ll get more information. It’s good to keep things like this in mind…Cyprus is GREAT, but it’s just like any other place in the world – it has issues. Have a great month and big smiles… Kim |
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What impact will reunification have on Cyprus property?Firstly, if you’re not up to date with Cypriot history or politics, the South and the North of Cyprus have officially been ‘at war’ since 1974. It’s amazing, but I’ve talked to a few people interested in buying in Cyprus who didn’t realise this! In 1989 there was an issue, but since then it' s been peaceful. There is a UN buffer zone that spits the country in half and crossing the border is a mere formality at this stage. In one of my weekly emails I send out my experience of going from the South to the North. Depending who you ask, you’ll get varying stories as to what the exact history is, so I suggest that you are very careful when raising this subject in Cyprus. It is a VERY sensitive topic as many lives were lost and vast numbers were displaced from their traditional homes. By the way, if you’re ever in Kapparis, go past all the bars and restaurants until the road ends. There you’ll find a look out point where you can view the Turkish Occupied area plus a mini zoo and a museum dedicated to educating people about the war. An interesting mixture I think you’ll agree! There are Greek Cypriots (mostly in the South), Turkish Cypriots (mostly in the North) and then there are people from other countries living in Cyprus. In the North, you’ll also find Turkish people…people who came from Turkey during the war and decided to make Cyprus their home. From what I’ve been told, Turkish and Greek Cypriots lived side by side before the war and for the most part, things were fine. Both sides have suffered…both sides would like to get their properties back and resume life as it was before the war. What is the solution? How do you evict the people that now live in the properties owned by displaced people? Where do they go? There are so many issues and frankly it seems one of those situations that are virtually impossible to solve. However, there is always hope. One factor in favour of reconciliation is that Turkey is very keen to join the EU and, without a solution to this problem, that isn'’t going to happen. Plus Cyprus is earmarked to receive a huge sum of money from the EU if they find a solution. With this money, they will be able to build a better infrastructure, better systems, and a whole slew of things to make the country more appealing. Another thing that makes me hopeful is that, when the chips have been down in recent years, when earthquakes and fires have strained Greece or Turkey’s facilities to the very limit, they have come to one another’s aid. Miracles DO happen…!! Anyway, progress has been made as the new President (Demetris Christofias) and the dude in the Turkish Occupied area (North Cyprus) have agreed to move things forward and have opened up the border between the two countries at Ledra Street in Nicosia. If you’ve never been there, it’s quite interesting. The particular area in Nicosia is the old town shopping district. It has a Starbucks so it must be a popular area…yeah! Anyway, there are nice shops and you get a good idea of how Cyprus was several years ago. However, there is a wall built at the end of the street and, if you look over it, you see that the road carries on but there’s nothing there except for ruins, shrapnel and debris… And if you look far enough, you’ll see people shopping, but in the Occupied Territory – the Turkish side. When I looked over the wall there was also an army guy with a riffle next to me, but I assume he’s gone home now! Are you wondering when I’m going to get to the property side of things? It’s coming. Right – now that the border has open up there are people from both sides crossing back and forth and increasing business on both sides. All the shop owners on Ledra Street are extremely happy due to a huge increase in sales. The cost of business premises is expected to go through the roof as more people will be demanding space in this popular area… The president of the Real Estate Association recently claimed, ‘"It is too soon to say by how much property value will increase but it definitely will. At the same time, demand will determine the use of property and we might see some shops turning into cafeterias and restaurants." So – is this an indication of what will happen if the whole border opens? Cyprus is a small country - it only takes a couple hours to drive from the east to the west. I feel that if and when the borders open, the South will benefit from the Northerners visiting and vice versa. Rather than one side benefiting from tourists, they both will. With peace - and without a UN buffer zone running through the middle of it - there will be an increase of visitors to the island and overall the entire island will benefit. With this in mind, provided a solution is found, I truly feel that property prices will increase greatly. So…if you have a property in Cyprus, I think it’s going to be a very worthwhile investment. And if you haven’t purchased yet, but are seriously thinking about it, I would find a property now rather than later. And please note…I do not agree with buying property in the North - you only have to read the British Embassy site that says not to do it to be scared off. There is a huge risk that you’ll be sold a property (or land) that was once owned by a Greek Cypriot that has been displaced. When the problem is solved, you don’t want someone knocking on your door saying, ‘This is my house or this is my land – get out!’ This issue, however cannot happen in the South as the Cypriot Government (South) owns all the Turkish Cypriot houses…You can’t buy them – no one can. Do you have thoughts on the impact of a solution on property prices? If so, I’d love to hear them. Send me an email ;) or post something on the Forum: |
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An Option the Banks Won't Tell you About....by Smart Currency’s Charles Purdy.It is often thought that the only way to buy currency is by paying for it in full. Most buyers that don't know about currency options buy the currency as and when it is required - they wait until the last minute. This is what the banks love their clients to do as the client is 'forced' to buy at the rate the bank offers. Some buyers buy the €’s immediately when they know the amount even if they don't need to use them for 3 months. Buyers do this to avoid the cost of the euros increasing so they know their exact costs. However there is a more efficient alternative that the banks fail to tell you about. The alternative is to secure your currency requirements (without paying the full amount for them) using what is known as a forward contract. Pretend that you require €100,000 in three months time and you don't want to risk the sterling cost increasing by £5-10,000. (An increase can easily happen due to changes in the exchange rate between now and 3 months time) You can agree an exchange rate for those €’s now. All that would be required is a deposit of up to 10% of the sterling purchase cost. This means that you don't need to pay the full amount for the Euros now, so you can keep 90% of your funds in a sterling high interest account. By doing this you will know EXACTLY how much you will require when it comes to pay for the €’s in three months time. (You'll know that you won't need to pay an extra £5-10,000 ) It may sound complicated but is very simple to do when you work with a company like Smart Currency Exchange. And the joy of such an approach is that it removes all the uncertainty and the associated stress and strain as you know exactly what your cost will be. Sterling The improvement
that sterling enjoyed at the end of last week was short lived. It seems
to have been a case of buy on rumour and sell on the facts... On Friday
it was rumoured that the Royal Bank of Scotland would raise £12bn
through a rights issue and that the Bank of England would aid liquidity
through the “buying” of £50bn in mortgage loans from
the banks. These are now facts, and because of these facts sterling
has lost ground. It is thought that the Bank of England will continue
to cut UK interest rates and as such sterling is seeing one of its main
supports slowly eroded. [All in all, this means that overseas property
will become more expensive] The Euro The € has had an interesting week and sits at €1.246/£1 inter bank. Euro land inflation is still at the top end of expectations which means that the European Central Bank will not cut the € interest rates in the short to medium term. However, there are ever rising concerns about the Euro land economy as the strength of the € is making Euro land exports ever more expensive. The € still has its “safe haven” status which it has now held for a while but pressure is continuing to rise in Euro land. However don’t expect the € to “blow up” any time soon.
Why
overseas property buyers lose money... This 10-page educational report outlines:
And just a couple remarks about the report from our readers...
To get a copy of the report at no charge go to: http://www.smartcurrencyexchange.com/freereport.htm To get a Better-than-Bank
rate go to: http://www.smartCurrencyExchange.com/smartsquotation.htm
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Project Purple Mansions!
The Project is called Purple Mansions, but don’t worry…they’re not Purple, as you can see in the pictures. Purple Mansions is located in a quiet residential area of Kiti village. It’s a great location as it’s within walking distance of the centre with all the local amenities. And a short drive will take you to the proposed Golf Resort to the north of the village, or to the blue-flag beaches to the South. So…you can wake up in the morning, look at your partner and say, ‘Honey, should we golf today or take in some sun on the beach?’
Okay…this is what I consider to be the key features:
And what about the financials?
Due to recent regulations imposed by the Central Bank of Cyprus, purchasers need to provide a 40% deposit, with the remaining 60% financed through local banks. However, a certain bank in Larnaca has agreed to provide finance on a 20-80% split for single purchases. If you’d like this great deal, please let me know and we’ll put you in touch with the right people. Regarding the payment details:
What return on your investment should you be able to achieve? This opportunity has been designed with a medium to long-term strategy in mind in order to maximize the investment. Area factors which affect positively the investment potential on the property are:
Project features which affect positively the investment potential are:
Rental Income VS Mortgage Payments – this has been provided by a very reliable estate agent and is based on the Paphos region existing Golf Courses and the villages surrounding them. Keep in mind that although Paphos is a busier area, Larnaca is right on it’s heels and is expected to come in line with Paphos in the future.
Total Yield approx 9.2% So…if you find this development interesting, give me a shout (or an email! Or fill out my property form…) |
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Don’t make a fool out of yourself - do your sums!!In the early 60’s the race was on globally to introduce colour TV to the world. On April 1 1962, one of the most famous practical jokes convinced the Swedish nation that simply by stretching a pair of stockings over black and white TV screens it was possible to view colour images. Naturally the April Fools hoax featured a huge amount of convincing technical jargon, peppered with gimmicks, including sitting the required distance from the screen with the head moving backwards and forwards rhythmically to achieve the desired coloured effect…! Amazingly, Sweden was duped! A footnote here: Sweden commenced permanent full colour broadcasting to the nation on April 1 1970! Joking aside, when moving to Cyprus it’s important to do your homework and understand all the steps involved to ensure your success. Just because friends do things one way that does not necessarily mean that it’s best for you. One key element that many buyers fail to consider is the full financial future for yourself and your descendents. The creation of your Will and ongoing Estate Planning is an absolutely essential consideration. If you are keeping any links with the UK, be it property, a bank account or that you continue to hold a British passport, it’s advisable to keep your UK Will active as well as preparing a Will in Cyprus. On the other hand, if you are planning on severing all ties with the UK it is paramount to follow precise steps. One step omitted could cost you an enormous amount in taxes plus potentially disastrous consequences for those that you wish to benefit from your estate. Incidentally, I
can see the “How much will it cost me “ question forming
in your mind, as it did in mine! The good news is that the IFA we will
recommend you to will charge you nothing (no, you have not read that
incorrectly!!) for the benefit of their advice initially. The point
at which they start charging is when you take them up on the advice
given and retain their services to do so. Their boast is that, at that
stage, they hope to make or save you more than they actually charge
you, certainly over the medium term. Independent financial advisers
must also offer their clients the option to pay for advice by fee rather
than commission.
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Protecting YOUR Interests – Specific Performance ExplainedBy Efrosine Georgiadou Introduction The question you
want to ask yourself is: “How will you protect your interest in
the property until you become the absolute owner of it”? Specific
Performance ‘Cap 232’
provides that a contract for the sale of immovable property can be specifically
performed provided that it is a valid agreement in writing and provided
that it is lodged at the land registry within two months of signing.
The person that is named on the contract as the vendor must be the registered
owner of the property. If the purchaser intends to bring an action to
specifically perform the contract he must ask the Vendor in writing
to present themselves at the land registry and transfer the property
to him/her within a specific deadline. If the vendor fails to do so
the purchaser can go to court and claim for specific performance of
the contract which means an order by the court forcing the vendor to
transfer and register the property into the purchaser’s name.
Procedure As soon as the contract
of sale is signed the purchaser or their lawyer will stamp the contract
at the tax authorities. The stamped contract will then be lodged at
the land registry. A charge of €1,71 is paid and a receipt is given
back to the purchaser or their lawyer with a specific performance reference
number. When the contract is lodged at the land registry for specific performance the purchaser obtains a “real” interest in the property. An encumbrance is created over the property. The significance of an encumbrance is that the interest of the purchaser takes priority over any next encumbrances or interests in the property or claims by third parties that may arise afterwards. The encumbrances on a property take priority in accordance with the time that they are lodged. For example, if the property is mortgaged after the date that the contract has been lodged at the land registry the purchaser’s interest in the property will not be affected. The reason for this is that the specific performance will be an encumbrance that will take priority over the mortgage because it will be first in time. The same happens in the situation that the vendor resells the property to a person other than the purchaser without the consent of the purchaser. Again this action of the seller will not affect the purchaser as the purchaser will have an interest in the property which takes priority over any next interests. The second role
of the specific performance is in the case that the vendor refuses to
transfer and register the title deeds of the property into the purchaser’s
name. In such a case the purchaser goes to Court and claims for a “specific
performance order”. The Court will order that the property is
transferred and registered in the purchaser’s name. However, if
the contract of sale is not lodged at the land registry for specific
performance purposes the purchaser cannot ask the Court for such an
order and has to limit him/herself to monetary compensation. What shall a purchaser do to protect him/herself?
Conclusion The lodging of the contract of sale for specific performance purpose may be the most important part of the whole conveyancing procedure with regards to safeguarding the purchaser’s interest in the property. It costs very little but may worth a fortune.
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As I’m sure you realise, I love my wine. When I first went to Cyprus I thought it was terrible: I would ask for a ‘Dry White Wine’ and it usually tasted like vinegar and some sort of liquid medicine a doctor prescribes…Luckily, after a few, I fail to notice the taste anyway. One evening I was at a restaurant and someone ordered a bottle of wine. I took a sip and said, ‘Wow – it’s great to drink a wine that tastes good in Cyprus – what country is this from?’ To my delight and dismay, the wine was from Cyprus. Delight as I now knew the name of a wine that I could enjoy from the first glass. Dismay as it was a very proud Cypriot that I made my comment to…ooops… Not long ago - on the 10th of April - there was a Cypriot wine competition with 160 wines being judged. The first major gold medal was for a Commandaria wine, which went to St Barnabas 2004, by Sodap Ltd. The second gold medal went to a red dry wine – Vlasidi Shiraz 2006, by Vlasidi Winery Ltd – and the third major gold medal went to a white dry wine, Hadjiantona-Chardonnay 2007 by Domain Hadjiantonas (Kolas) Winery Ltd. If you get a chance to try any of these and let me know what you think! Before I go I wanted to share with you a very nice piece of feedback we received recently: "Having found the forum, subscribed to the free newsletters & purchased the Guide to purchasing property, it was amazingly easy using the tips & suggestions, to define my requirements & establish my strategy for what I really wanted. Then once introduced to the Guides Company's network of friendly, helpful associates, everything fell into place. And this despite some very attractive, but potentially risky, alternatives which I could have easily tempted into. However, I had a plan to keep me on track & knowledgeable friends to draw advice from. I have now successfully purchased a unique property, which I believe I will enjoy during my future retirement in a friendly & more attractive climate than the UK. Thanks again Kim to you, your colleagues & all your kind associates & their unique way of working. Best regards Brian Dorey." Until next time,
have a great month, Kim Brown |
Purple
Mansions will have only 10 super apartments: 2 x 1-bed units, and 8
x 2-bed units. The project will feature a large communal overflow swimming
pool (of course!), spa, and gym, to name a few… (‘Honey
– should we spend some time in the gym before we head out for
the day or would you like to just relax in the spa?’)
Prices
on Purple Mansions range between EUR 162,317and EUR 213,575. All apartments
are above average in size, featuring large, comfortable, well-designed
internal spaces, large verandas, and either private gardens or roof-gardens.