Buying property in Cyprus has always been risky, even in the Southern section - This is because many families moved away from Cyprus during the mid-20th century battles between Turkish forces and Greeks and title of properties can have hidden problems.

Things are starting to move improve, but anyone wishing to visit northern Cyprus cannot not buy an airline ticket direct to the north; they have to fly into Turkey first and then find a connecting ‘local' flight to Cyprus.

Now, politics are changing and, possibly with EU membership in mind, Turkey is starting talks with the south, with the aim of opening-up the whole island. You can, instead, fly to the south and take a taxi or hire car. Tourism figures are expected to shoot up once the border has been opened, because northern Cyprus, though beautiful, is relatively unheard of.

The political moves have been followed closely by foreign investors, because properties are 30% cheaper than in southern Cyprus, which has been a popular tourist destination for many years. For this reason investors are waiting in the wings to snap up as many properties as possible. First to be bought will be holiday rental villas, but surrounding properties will also go up in price, because rental villas will set the level.

Those holiday villas already being rented are usually hired by high-income professionals who get the advantage of lower rental fees plus lower prices on everything else. However, analysts believe that once the whole island is up and running, higher prices will emerge to match those in the south.

Owners who want to have extended vacations in the area for longer than three months at a time must apply for temporary residence status. Moving completely to northern Cyprus will mean applying for permanent status, but only after five years of repeated three-monthly visas. The granting of permanent status will involve blood tests, x-rays, full medical check up and police check.

The procedure is complex and long drawn-out and many say it is ‘like a ‘battle'… it depends on who you know and who acts on your behalf. If visitors/owners intend staying over the three months, they should apply for another visa immediately they land on the island, because fines of about £28/$56 a day are strictly imposed.

A Cypriot website strongly advises employing a northern Cypriot lawyer who speaks English, and who has no connection with the property owners, the property being bought, or the developer. He should have conveyancing experience, especially with foreign nationals. Do not rely on lawyers in the south, because the laws and legal system there are very different. Time should be spent on asking direct questions about title deeds. Buyer beware!

One development in northern Cyprus, The Colony, offered by the Obelisk company, reports the difference a celebrity makes to selling rental villas and to subsequent price rises (which, of course, can also be profit rises!). Since the champion boxer, Joe Calzaghe, has bought into The Colony, interest in northern Cyprus has grown. But not every project has celebrity buyers, so costs are likely be a little lower elsewhere!

One of the biggest problems for anyone buying in northern Cyprus is ownership of deeds. A large number of unfortunates have bought in northern Cyprus, only to have, many years later, a stranger knocking on their door demanding to have their land and house back! The law is on their side, so the foreigners must leave with nothing, even if they bought in good faith.

A similar situation is found in most Mediterranean countries, where family move away and return many years later to claim their family property… even if it has been sold. When you buy, make sure every person has been accounted for, because everyone in the family must sign-away their title to the property.

The various checks you need to make can take a while, as opening and closing times differ, depending on the season. In the summer, queues are commonplace as many governmental offices, banks, etc., only open in the morning. In winter they open again in the afternoon, for about two hours.

Property managers who speak your language (or approved translators) are essential. The larger developers, such as Obelisk, tell me they do thorough land searches to ensure there are no hidden problems with absent landlords or owners. The Turkish government issues final certificates of clear title. This also applies to land previously owned by a Greek Cypriot.

Though these large companies offer what they say is a safe contract, the British High Commission still advises employing a northern Cyprus lawyer. So, it is wise to have an independent lawyer check-over a developer's searches, just in case they miss something.

Despite historical problems, now is the time to invest, or express a formal interest, in northern Cyprus property, while prices are still 30% lower. Prices will inevitably rise quickly once the borders are fully open. By going through a reputable developer and local lawyer, the legal intricacies will be sorted out well before Turkey issues your certificate of ownership.

At the moment northern Cyprus new-build villas of 155 sq.m and apartments offer a return of 177% over five years, with an annual rental yield of 9% (estimated), based on an initial investment of £6,500. Obviously, these figures differ with the development.

Another very good option is renovation. An increasing number of investors are opting for older properties with character for renovation. They have an edge on rental opportunities, especially when they are located in pretty villages, near harbours, etc. These renovation projects usually have much more land than modern properties, complete with established gardens and olive groves, carob and palm trees.

The purchase price reflects the amount of renovation needed, but can be well below market price. If located in a village, the renovated villa is likely to attract a selling price and rental income well above that of new-builds (which tend to be outside the main areas of activity). And, because of the bonus of extra land, owners can build additional units to increase rental opportunity.

barry.napier@ntlworld.com
Hotel and Travel Journalist

Contact:
Ministry of Tourism, www.northcyprus.cc