CYPRUS
“In Cyprus I found a warm welcome, wonderful food, and glorious weather, complemented by the familiarity of driving on the left and an English- speaking population”
T e banking system collapsed and in order to receive a bailout from the European Central Bank and International Monetary Fund, Cyprus needed to raise fi nance of its own. T e suggestion that all bank deposits
would be subject to a levy led to protests but it was subsequently decided that all deposits below €100,000 would be safe, but any amounts above that would either be subject to a 40 per cent levy, or in the case of accounts at Laiki Bank, they would be lost.
So what now for investors and expats? I travelled there to report for BBC1’s T e One Show expecting riots and panic on the
streets, but found people enjoying their holidays, and remarkably stoic locals. One Cypriot man in Paphos said:
“You can knock me down, but I’ll get back up. Fiſt y years ago I was a boy in a village riding a donkey. Now I drive an expensive car but if push comes to shove, I still know how to ride a donkey”. T e sentiments of the expats I spoke to
were also rather surprising, considering the general uncertainty, but were generally along the lines of “We’re not leaving – this is our home”. Neil Hart, who owns a cafe in Paphos and
has lived in Cyprus for 14 years, had been saving hard, to buy a property outright, and was due to complete the week before the banking system collapsed. In a cruel twist of fate, he was at the bank,
in the queue to draw a bankers draſt but aſt er a phone call to his solicitor, was told the vendors were not quite ready to complete so he should hold fi re until the following week. T at weekend, the banks closed and he was unable to access the funds for his
property purchase. When the banks re- opened €40,000 of his money was “frozen” and he still doesn’t know whether he’ll get it back, whether he’ll be off ered shares, or whether he will lose it altogether. To add insult to injury, the British vendor
of the property he had planned to buy took it off the market, because they were unable to return to the UK with the proceeds of the sale due to restrictions on taking money out of the country. “It will set me back a few years, maybe
even permanently, but I’ll just have to start saving again,” Neil commented. “I wish I’d bought that house sooner as
I’d feel happier with my money invested in property – it will be a long time before I trust the banks again.” In contrast, London couple Gina and Nick
Georgiou, both of Greek Cypriot origin, were relatively fortunate. Gina and her sister received a large
inheritance when their father passed away in Cyprus and for the last 18 months have been building two luxury villas in Paralimni for their families. More by luck than judgment, at the time
the crisis struck, they had paid most of their contractors and had €107,000 remaining in Laiki Bank. When it closed down, they lost €7,000,
Below: Luxury villas by the sea
but the rest was secure. T ey plan to return to Cyprus this summer and retrieve the rest from their bank account, but Nick now believes that there has never been a better time to buy in Cyprus. “People that need to sell at the moment
are willing to negotiate, especially if you have cash. It’s a buyers market.” Buyers in Cyprus will need time to
re-gain confi dence. Antonis Pisharas from Aristo Developers,
a well-established company in Cyprus (
aristodevelopers.com), says: “T e overseas property market in Cyprus is going through some challenging times. “Cyprus should at this stage be considered
a ‘lifestyle’ purchase and not so much an investment. Prices of homes have been falling and are likely to continue downwards due to the island’s banking crisis. “We are positive that the demand from
overseas markets will increase due to further price reductions and bargains in certain locations in Cyprus. It’s up to us to turn the economic crisis into an opportunity for potential buyers and investors.” He adds that Chinese buyers seeking
residency permits through property purchase, cash buyers and demand from new markets such as Egypt have increased sales in Paphos, Larnaca and Famagusta. T ese are strange and uncertain times
in Cyprus – at the time of writing, capital controls are still in place restricting withdrawals to a maximum of €300 per day - but one thing is for sure: even with the risk of prices dropping further, most people feel their money is safer invested in bricks and mortar than in the banks. §
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