Following the March 2013 banking crisis in the Republic of Cyprus, when millions of euros in customer savings were written off by the country’s two largest banks, the economy took a bashing. As a result of a €10 billion European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF) bail-out, austerity measures resulted in pay freezes, unemployment and inevitable hardship.
The impact of the banking crisis on the British expat community, though, was probably overstated, according Carl McCann, who has lived in Cyprus for 20 years.
"The talk is all about gloom and doom, but in my opinion Britons living here tend to keep their savings back in the UK or elsewhere," he said, adding that events last March did not appear to trigger an expat exodus from the island.
Despite the crisis, some economic sectors such as accountancy, legal services and shipping have fared better than others, in part because they service international business.
One example is the tourist sector, with government statistics showing that tourist revenues for September 2013 were up by 21.9 per cent compared with the same month in 2012. For the future, the discovery of offshore natural gas in 2011 bodes well.
Following a big dip in the property market last April and May, by June property sales to international buyers had picked up.
"The property market is seen as a pillar of the economy by the government," said Vasilis Hadjivassiliou, partner at PwC, the accountancy firm, in Limassol (www.pwc.com/cy) .
A number of government incentives for international buyers bears this out. For instance, anyone buying new property that carries VAT when it is being purchased for their own use or permanent residency is eligible to pay 5 per cent VAT instead of 18 per cent.
There is no shortage of new property geared to the international buyer. For instance, at the 578-acre five-star golf resort Aphrodite Hills (www.aphroditehillsproperties.com), phase one of the gated high-end Alexander Heights launched last year.
The development, which has unencumbered sea views, is nearly ready for occupation. Eight of 10 villas and half of 16 apartments have already been sold to international buyers.
Phase two with 28 units – apartments, junior villas and villas – will be launched in March, with prices ranging from €501,286 (£420,000) through to €3.2 million (£2.7 million).
"While March, April and May sales were wobbly, by June we were – despite the banking crisis – experiencing healthy pre-crisis sales," said Loucas Kitrou, Aphrodite Hills director of real estate.
"Tourism, infrastructure and security remain in place, fuelled no doubt by our outstanding Mediterranean climate."
Another new project geared to international buyers is at Akamas Bay (email@example.com), where 39 modern villas cost from €1.9 million to €4.7 million (£1.6 million to £3.9 million). Minthis Hills (minthishills.com), set above Paphos, draws on contemporary designed properties with two to five bedrooms priced from €1.38 million (£1.16 million).
While government incentives have buoyed up the expat property market, a November statement from the European Commission, European Central Bank and International Monetary Fund acknowledged that Cyprus was on target to meet the terms of its bail-out agreement. It also showed that the economy was doing better than expected.
"All fiscal targets have been met with considerable margins, … prudent budget execution, and a less severe deterioration of economic activity than originally projected," said the statement.
Good news for locals and expats alike.
Opportunities abound in the Cyprus property market