There are many variables to take into consideration when making a property investment decision – particularly with regard to off-plan investments. Such variables include the market, the developer, construction timeframe, tangible product and of course finance. The finance element to an investment can be broken down into several key areas including that of currency. One currency in particular that’s building pace this year is the Euro.
With several key countries focused on adopting the Euro, property investors must fully appreciate what it means to take on the currency. Cyprus is one such market on the verge of switching to the Euro from its traditional currency – the Cypriot Pound. The move to the Eurozone comes on January 1, 2008 for Cyprus and with it, changes to the economy.But what does this mean to Cyprus and those of us looking to invest in the Cypriot property market?
With several key countries focused on adopting the Euro, property investors must fully appreciate what it means to take on the currency. Cyprus is one such market on the verge of switching to the Euro from its traditional currency – the Cypriot Pound. The move to the Eurozone comes on January 1, 2008 for Cyprus and with it, changes to the economy.But what does this mean to Cyprus and those of us looking to invest in the Cypriot property market?
Plenty. Simply put, investing before the adoption allows your investment to flourish, as property prices will almost certainly increase after the currency switch. Membership of the Eurozone means a lot to Cyprus.
It will help shield the island against economic turbulence and significant interest increases.One of the most important reasons for Euro adoption is price stability. Price stability is the main objective of the European Central Bank’s monetary policy. Furthermore, since the Euro market is highly liquid, this will result in increased efficiency of the country’s financial sector and the better allocation of financial resources.
The Euro will strengthen macroeconomic stability in Cyprus, ensuring low inflation and low interest rates currently enjoyed by Eurozone members. The single currency brings stable prices for citizens and more opportunities for businesses. Moreover, being part of the single currency will further promote trade opportunities in the global economy and attract a large amount of foreign investment.
Cyprus’ interest rates have already fallen considerably. The long-term interest rates declined by some 330 basis points from about 7.5 per cent in December 2001 to just 4.25 per cent in December 2006. Furthermore, over the same period mortgage interest rates fell 160 basis points from around eight per cent down to 6.5 per cent. This brings very practical benefits, allowing both domestic and foreign investors to borrow money cheaply thus fuelling property purchases and spurring demand.
As a Eurozone member, Cyprus will have a currency with a global position comparable to the US dollar. The role of the Euro in international trade, the global bond market and as an official reserve currency has increased substantially and continues to grow in importance. The attractiveness of the Euro as a world currency means that tourists can increasingly travel all over the world with Euros in their pockets while businesses are increasingly able to trade in Euros beyond the borders of the Eurozone.
Cyprus’ property market has enjoyed strong, consistent growth in recent years with more of the same to come and with the milestone of the Eurozone just around the corner, now is a good time to invest in Cyprus.
For more news on Cyprus Property please visithttp://www.cyprus-online.com/buy-sell/cyprus-news.html
1 comment:
Larnaca Property has increased in price in the past few years. Visit
Tersefanou for cheaper Cyprus property, near a golf course and on the way to see Pafos Property . Easyjet starts flights to Paphos, Cyprus in April 2008. EasyjetCyprus
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