Cyprus is enjoying a long period of gentle house price rises, and the growth seems to be accelerating. A continued rise in house prices for the foreseeable future seems likely, and analysts rule out any hint of a price bubble. House prices rose 8.02% y-o-y to June 2007, after a 6.56% rise in 2006, and a 2.20% rise in 2005, using the data (but not the calculations) from BuySellCyprus.com

David Martin, a Portfolio Manager for Property Investment Specialists Barclay Fisher says "Cyprus has been on the radar of savvy investors for some time since joining the EU in 2004 and has seen tremendous growth, especially aropund the resort towns of Paphos and Aiya Napa. With those regions now enjoying a more mature market with small steady growth I beliecve the focus will turn to the Region of Larnaca. Now within the common currency I can see 2008 and 2009 being record years for the island and theres certainly plenty to attract buyers such as huge tax breaks and excellent planning controls to help avoid over-building. We will certainly be offering our clients the opportunity to invest in an apporved project there this year."

Liberalization of the financial sector, a decrease in interest rates, and increased demand for higher quality housing and second homes, and the introduction of VAT on the sale of new property are the main drivers for the recent price increases. If the Government goes ahead with its plan to introduce VAT on land sales in 2008, further price increases are anticipated.

EU nationals who are resident in Cyprus may own as much property as they wish. Non-resident EU nationals may own as much land as they wish, but if they wish to buy any other sort of property, ownership is restricted to one house or one apartment for which approval from the ‘Council of Ministers’ is needed. Regardless of their residency status, nationals of non-EU countries must seek the approval of the Council of Ministers before they can own any type of immovable property. Furthermore, unless there are exceptional circumstances, their ownership will be limited to: an apartment, a house, a building plot or land up to approximately three donums (4,014 sq.m.).

Much of the property market in Paphos, one of the most favoured areas, is driven by British buyers. Owners wishing to rent their property to the tourist market should seek a permit from the Cyprus Tourism Organisation. More information on the Cypriot Property Market is avalable from www.overseas-property-advice-t83.net