Investment Homes - Larnaca

Larnaca,located in the stunning south east corner of Cyprus is currently undergoing an expansive redevelopment phase funded by just over 3.5bn Euros. Double digit growth is predicted in the property market in Larnaca and this makes investment in off-plan property in the region extremely attractive.

So what is the “double digit” growth actually based on?

Recently valuations by Alpha Bank,Cyprus’ second largest bank have shown a 20%+ increase in property values around the area,especially in village of Pyla,where there is current UK investment in off plan property.

These figures are based on the predicted increase in tourism and the redevelopment of the islands infrastructure to cope with demand. Planning restrictions for development density also mean that market saturation,like we have seen in Spain over the last few years,will be avoided which maintain property prices over the coming decade.

Three key points to note are the development of the first PGA managed Golf Course on the island just minutes drive from Larnaca,the redevelopment of Larnaca’s oil refinery into a 750 berth marina with 120 retail units including bars,restaurants and shops and the construction of the new airport terminal which on its completion in November 2009 will see the introduction of budget airlines such as Monarch and Easyjet enter the market making Cyprus an affordable yet upmarket mediterranean destination.

Unlike most of the other countries that have entered the EU recently such as Bulgaria,Cyprus already has an established expatriate and tourist base. Coupled with the fact that the average house prices in Larnaca are some of the lowest in the Euro zone,it promises to give a healthy return to any property investor who takes advantage of the market sooner rather than later.

Many people follow the misconception that overseas property investment is complicated and risky due to lax planning laws and problems with land/property ownership as we have seen in areas of Spain and Italy,however Cyprus has imposed strict licencing and planning restrictions meaning that not just anybody can buy land and build on it. The main plus point that should put would be investors minds at rest is that Cyprus has the same lad registry system as the UK where title deeds are registered and held documenting legal ownership. The other major factor for investors to consider is that land and property can be purchased on a freehold basis making ownership definite and investment secure.

Larnaca Apartments

Anyone thinking of investing in Larnaca should consider the development of luxury apartments in this south-eastern region of the island. Ranging from compact studio apartments to sprawling penthouses there is plenty of choice no matter what your budget.

Larnaca could be misinterpreted as an industrial town and on first impressions doesn’t always impress. The large port and disused oil refinery are an eye sore and the outer areas of the town need some attention.

However Larnaca is going through a period of change,huge investment by the European Commission has meant investment into the towns infrastructure including new motorways,airport terminal,PGA Golf Course and a 750 berth marina with 120 retail units. All coming in the next 5 years.

The government in Cyprus plan for Larnaca to be THE tourist hotspot for the island and they certainly have the plans in place to achieve it.

So back to the apartments…

Apartments in Larnaca can be bought for a relatively low investment and recent changes have allowed non-Cypriot residents to obtain local mortgages and buy their properties on a freehold basis. With Larnaca’s average house price being one of the lowest in Europe and with 6bn Euros worth of investment being plowed into the island it makes for an attractive combination of high capital growth and strong re-sale value for Larnaca Apartments.

It is worth bearing in mind that the Cypriot Government are imposing strict development restrictions to curb market saturation and prevent any adverse affects on the property market,citing long term growth and healthy returns for investors.

Overseas Property Investment

Overseas property investment has historically yielded great returns for investors,but with the global credit crunch taking its toll,investors are now seeking new emerging property markets to maximise their returns over the next five to ten years. One of the most exciting places for investors at the moment is Larnaca,Cyprus.

Cyprus is a diamond in the rough as far as Mediterranean holiday destinations go. It has an established tourist and expatriate market that has been growing steadily for the last 40 years under the radar of EU investment.

When Cyprus joined the EU in May 2004 they were granted 6bn Euros to fund the development of the island’s infrastructure including improved roads and airport expansion,but also to grow its tourism industry from 3m visitors per year to 10m.

The bulk of this funding will be injected into the city of Larnaca on the south east coast of the island and will include a new airport,attracting new budget airlines such as Easyjet and Monarch. A PGA golf course just a few kilometres from the town and a luxury 750 berth marina which will replace the old oil refinery,all of which will transform Larnaca into a cosmopolitan holiday destination.

Over the last three years demand for property has increased by an average of 15-20% per annum. This will continue with EU membership as people from the land locked central European countries,which are also destined to become member states,are expected to look for second homes on the island (Source: FT World Report)

For investors looking for healthy capital growth over the next 5 years Larnaca is definitely a location worth considering.