Ammochosto’s residential property market has flourished in the last five years and the area has witnessed a huge increase in demand of privately owned holiday homes.
Ammochostos property refers primarily to Protaras and its surroundings, which is the main attraction for property investment in the area.
Traditionally Protaras and Ayia Napa have been world renowned as tourist resorts. Ayia Napa targets the young and has a vibrant and busy night life, while Protaras is seen as a more relaxing family destination.
Competition is intense and the commercial streets are filled with agents and developers selling local property. Prices have been increasing by 15%-20% each year over the last 5 years. Protaras and the surrounding areas currently present the best capital gains potential on investment property in Cyprus. The reasons behind this are the following:
By selling off-plan units in a country away from Cyprus investors benefit from the information asymmetry: From the point of view of the investor selling on the units, UK buyers are away from information and competition and they can sell their units at a price they can reasonably profit from, while their competition is geographically away. Meanwhile UK purchasers feel more secure when buying from known UK vendors.
Investors usually put down a deposit of approximately 20%, while getting a loan for the rest with a grace period of 1-2 years (paying only interest). They resell all the units purchased within the grace period and earn a return of 20%. If the timing is right, the investor can make a return of almost a 100% of the original investment and such gearing can turn this option into a fantastic investment opportunity.
Demand for property in Protaras is still very strong and this is evident from the fact that sometimes supply does not always meet demand. Along with scarcity of land, this demand regularly increases labour and material costs while steadily pushing prices upwards.
95% of property purchasers in Protaras are foreigners, while 85% of this figure consists of British purchasers. For now holiday home owners are the biggest category, while retiree numbers are increasing every year. Long and short-term investors are also beginning to play a very significant role in annual sales volumes in the area.
The property industry in Ammochostos is on the upside of the property cycle, and an increased demand and expectations for the future implies it has not yet reached the peak of the cycle.
Prices in Protaras are significantly lower than other similar properties in Paphos and Limassol. Considering Protaras has a developed infrastructure and is considered to be a newly established tourist resort, the gap in prices shows the market’s buying power is still very strong compared to other similar areas. The general perception is that the value of property purchased here is relatively high and the property market will continue to prosper steadily.
Developers have been selling their properties before starting the construction process. Profits are sufficient for investors and developers to cause an increased demand and in turn an increased supply of developed properties.
The wave of foreign investors is expected to get stronger, considering many investors have been liquidating significant profits and reinvesting their money in real estate here. This, combined with the fact that expectations on the English property market are not very good, encourages many investors to diversify their property portfolio in Ammochostos.
Get the latest property and investment opportunities direct to your inbox for FREE (you can unsubscribe anytime)
Cyprus House Prices fell 1.8% in Q1 2018
Cyprus Property Market is booming
Running a Business in Cyprus
Paphos and Akamas Peninsula
Lawyers in Cyprus
Starting a Business in Cyprus
All property news from Cyprus
Subscribe to our RSS Feed
Subscribe to our newsletter and keep up to date with the latest and best investment opportunities around the world!