Cyprus Property Buyers and the Euro

 

Many pundits said that property prices would go up in Cyprus on conversion to the Euro…….they were right….. but did they think it through and realise that it could happen this way?

It has been very easy to lose sight of what has been going on in the CYP/GBP/Euro triangle when many people have been focusing on the fix that was set way back in July for the Cyprus conversion to the Euro.  The fix was one Euro = 0.585274 Cyprus Pounds.

Since then the GBP has slipped against the Cyprus Pound and the Euro.  So what does it all mean for Cyprus property buyers?

At the end of 2007 the cost of an average 3 bed villa was Cyprus Pounds 190,000.

In December 2007, CYP190,000 would have exchanged for GBP 225,000 Earlier in 2007 the cost would have been GBP 214,000. An increase of 5%.

By 01/01/08 when Cyprus had adopted the Euro the same villa would have cost €327,000 which had an equivalent of GBP 248,000.

Just short of another 10% more and on a cumulative basis,15%. Seems unreal but true if you recall that earlier in 2007 the GBP/Euro rate was roughly 1.50 and it is now 1.34. At least it is a double take which validates the figures.

A Cyprus Property Index has recorded local price increases over 2007 of nearly 20%.  The cost to UK property buyers in Cyprus has increased much more on top of that because of the weakness of sterling.

Not a good time to buy then? Or do you think the cost of property in Cyprus will rise even more in the next few months as a result of local price hikes and exchange rate weakness?

As at March 2008 the projected CYP/GBP exchange rate would have been 0.77. 

This also means that holidays in Cyprus have increased much too far for the UK traveller and tourism can be expected to fall.

The Sunday Times has just published CYPRUS VOTED BEST COUNTRY IN THE WORLD TO RETIRE.  Makes you wonder how much up to date research was undertaken, doesn’t it, because this is not even mentioned !!

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