| North Cyprus Property has become a popular | | | | communities have reverted to the negativity and |
| investment for many EU investors in recent years, | | | | bitterness of earlier decades. In order for Cyprus to |
| with the majority of buyers being British. | | | | be reunited, both sides need to support this vision, |
| Cyprus was effectively divided in two after 1974, | | | | and within a framework of mutual compromise. Many |
| when Turkey invaded the island and secured North | | | | consider that the Annan Plan was, and remains, a fair |
| Cyprus as a safe haven for Turkish Cypriots who | | | | basis for reunification. Unfortunately, the Greeks have |
| were being persecuted by the majority Greek | | | | consistently rejected the main tenets of the Annan |
| Cypriots. | | | | Plan without articulating any coherent counter |
| The opportunity of the Annan Plan in 2004 for | | | | proposals. |
| reunification of the island provided a powerful stimulus | | | | From an investors viewpoint, the current situation |
| for the North Cyprus residential property industry and | | | | may be considered a propitious time for property |
| tourism. Despite the fact that a large majority of | | | | purchase, as prices remain flat. Certainly a 3 bedroom |
| Turkish Cypriots voted in favour of reunification, the | | | | villa with a pool at 88,000 is half the price of a similar |
| Greek Cypriots in the South voted against the Annan | | | | property in South Cyprus, while the price in Spain |
| Plan. The negative vote of the Greeks was heavily | | | | could well exceed 200,000. |
| influenced by the government, media and church in | | | | However, the future of the market remains clouded |
| the South. | | | | with uncertainty. Firstly, the Greek Cypriots have |
| Within months of the rejection of the Annan Plan by | | | | consistently claimed that some 85% of the land in |
| the Greek Cypriots, South Cyprus joined the EU. This | | | | North Cyprus belongs to dispossessed refugees who |
| provided a further boost to property development in | | | | fled to the South in 1974. Several Greek Cypriots |
| North Cyprus as many thought that it was | | | | have lodged cases with the European Court of |
| incongruous for the south of the island to become an | | | | Human Rights. There are apparently some 1,500 |
| EU member while the north did not. | | | | cases pending and these have now been referred to |
| The scale of this euphoria was significant. Land prices | | | | the North Cyprus Properties Commission, which is a |
| in 2002 were often in the region of 2,000 a donum | | | | North Cyprus institution, backed by Turkey. The |
| or 1,338 sq metres. During 2004, average land prices | | | | Property Commission is a new agency and needs to |
| in the north rose to around 30,000 a donum and | | | | demonstrate a capability to deal with such cases in a |
| have continued to rise to near 40,000. | | | | fair and effective manner. |
| There has also been a flood of new Estate Agents | | | | Secondly, Turkey has made an application for EU |
| and property developers entering the North Cyprus | | | | membership. As Turkey is a secular muslim state, |
| market, many of them British. | | | | several EU members have expressed reservations. In |
| However, the increase in land prices and the growth | | | | order to facilitate the application, Turkey needs to |
| of activity in the sector has not been reflected in | | | | open her ports and markets to other EU member |
| prices of property. A three bedroom villa with a pool | | | | states, including the Greek Republic of Cyprus. |
| on 700 sq metres of land will sell for around 88,000. | | | | Turkey has refused to do this unless it is coupled |
| Sales prices have only modestly increased since 2004. | | | | with a relaxation of the isolationist measures |
| The underlying economics are worth exploring. | | | | experienced by North Cyprus. |
| Current build costs are some 400 per sq metre, so a | | | | The fact that South Cyprus is an EU member has led |
| 130 sq metre villa will cost around 52,000. If a pool at | | | | to an alleged dispossessed Greek making a claim in |
| 13,000 is added, then the total is 65,000. The cost of | | | | the UK against a British couple who have allegedly |
| a 700 sq metre plot also should be added at 20,000, | | | | built a house on his land in the North. This is the |
| making a total of 85,000. The main Estate Agents in | | | | Orams case. This case was heard in London during |
| North Cyprus charge 5% commission, and when | | | | July 2006, and a ruling was made on 6 September |
| taxes are taken into account, there is very little | | | | 2006. The ruling was in favour of Mr & Mrs Orams |
| profit, if any, for a builder or property developer. | | | | and confirmed their right to purchase property in |
| These calculations explain the crisis in North Cyprus | | | | North Cyprus, regardless of whether the land had |
| property development. There are scandals in which | | | | previously been owned by a Greek Cypriot. This is a |
| property developers disappear from the island, | | | | landmark case and should provide a stimulus to the |
| leaving unfinished properties in their wake, such as | | | | North Cyprus property market. |
| Gary Robb of Aga Developments Ltd. Several large | | | | So it may take sometime for an investment of |
| construction companies and Estate Agents are also in | | | | 90,000 to increase in value to over 200,000. In the |
| financial difficulties, including North Cyprus Properties | | | | meantime, an owner of a North Cyprus property can |
| Ltd. | | | | enjoy the unhurried and laid back lifestyle of the |
| The exuberant optimism of 2004 has all but | | | | north and experience the friendship and warmth of |
| evaporated, and relations between the two | | | | the Turkish Cypriots. |