Why Cyprus could be Middle East’s Monaco. “THE TIMES”
The 7am direct flight to Cyprus on a Wednesday earlier this month was packed. Passengers on the front row of the plane had the red eyes of people who had been awake all night but, undaunted, ordered gin and tonic. By the time the plane was halfway through the four-and-a-half-hour flight to Paphos a hostess announced we had run out of prosecco. She was promptly booed by the crowd.
It is the first full tourist season for Cyprus since the start of the pandemic. Temperatures here range from a pleasant 20C to a hot 35C, and this summer Brits are having a free run of the island – the easternmost country in the European Union – and the property on offer, with little foreign competition.
Until recently the island had gained the nickname of Moscow on the Med – or Cypruski – thanks to the number of Russians, usually among the fiercest home hunters, who are thought to account for about 40,000 of the island’s 1.2 million population. In some areas the street signs are in Greek, English and Russian.
The war in Ukraine has marked a tipping point. Russians are no longer allowed to travel, and last month Cyprus’s government decided to strip eight Russian oligarchs of their Cypriot citizenship after they were sanctioned by the EU. The island has hosted about 15,000 Ukrainian refugees since the invasion.
There is another reason why Russians might not be as ubiquitous as before. Last year a government inquiry found that more than half of the passports Cyprus issued between 2013 and 2019 through the “golden passport” programme – through which the island was selling Cypriot citizenship, and therefore EU citizenship, to wealthy foreigners – were illegal.
Locals argue there has been an upside. “The passport scheme has actually improved the waterfront,” says Costas Constantis, a sales executive of Leptos Estates, a substantial local property developer that is also the biggest private landlord on the island – and the second largest after the Orthodox Church. He argues that the increasing demand from foreign investors has raised the quality of the housing stock. “But the way it was done was wrong and it worked against us, giving us a lot of bad publicity.”
In 1974, the year of the Greek coup d’etat and subsequent Turkish invasion of the island, Paphos was a tiny fishing village. “You would come here 20 years ago and think ‘how quaint’, but compared to now it looked like a dump,” Constantis says.
Leptos Estates has some 20 projects under construction around the island. Near to Coral Beach Hotel, on the edge of the Akamas peninsula, a national park and Unesco reserve, it has built 63 villas known as Coral Seas on land that was once a banana plantation. The villas sit in a gated community and most of them have private swimming pools; a communal gym and pool sit at the centre of the scheme. The white villas are vast, spanning between 3,200 and 5,300 sq ft. Prices here go from €690,000 (£585,000) for a three-bedroom property on the back of the estate up to €3.9 million for a five-bedroom waterfront villa.
Driving up the olive tree-studded hills around Paphos, Constantis shows me another scheme: Kamares Village. Here the properties don’t have the classic Greek island style of white, clean geometry, but a more traditional Cypriot charm. “Externally they look like traditional Cypriot farmhouses with big ceramic urns, but inside they are modern and have all the comforts,” Constantis says. Villas here range in price from €300,000 all the way up to €5 million, depending on location, size and amenities. The developer also offers investors the option to purchase a plot of land and self-build their own house.
Constantis says that there are two types of British homebuyers here: the ones after holiday bolt holes who “tend to buy apartments for less than €300,000, mainly to have a place to go to”, and digital nomads or retirees looking to relocate. “They prefer two or three-bedroom detached houses in a village setting. These are people coming to live here; they make good use of the properties and they don’t mind mixing with the locals.”
It’s not hard to see why these homes are so popular. They are enormous by British standards and solidly built. They are also fairly cheap, with the average house price in Paphos last year little more than €100,000.
Constantis adds that “the nicest thing about the Brits is that they club together”. In the Kamares Village, which he says was created specifically to accommodate British demand for such properties, there is a bridge club, a bowling club and a choir – all run by Brits.
“It’s a familiar environment for them,” he says. “They have been holidaying here, everyone speaks English. It’s like home, but with better weather.”
With the golden passport programme gone, Cyprus is trying to reposition itself as a Monaco in the Middle East. Foreigners moving to the island would get a number of benefits, from zero capital gains tax, zero foreign income tax and no inheritance tax. There is also a programme that allows buyers to get permanent residency status if they buy a property worth €300,000 or more.
Requirements, however, are strict. You can’t sell your property or you would lose the status (although you can sell and buy another property on the island) and you can only get citizenship after seven years, the last one of which you can’t leave Cyprus – not even for a day.
Another attractive option is “headquartering”. Foreign companies can relocate to the island, which has the EU’s lowest corporate tax rate at 12.5 per cent, together with 70 per cent of their staff.
Most of the businesses are moving to Limassol – the largest port, and the business centre, of the island – an hour away from Paphos. If the latter is quiet, low-rise and relaxed, Limassol – locally nicknamed Limassolgrad – is busy, urban and dotted with skyscrapers
“You won’t find any Cypriots in Limassol,” says my driver while parking in front of Limassol Del Mar, two imposing white towers on the city’s seafront. Prices start at €1.65 million for a two-bedroom flat, with furniture designed by the Italian designing firm Gianfranco Ferre Home.
Lena Flourentzou moved to Cyprus from Ukraine in the early 2000s and married a local. “I’m Cypriot … by passport, 100 per cent,” she says with a laugh. She is a sales executive at Limassol Blu Marine development, a two-tower scheme under construction next to the new marina. She explains that this former industrial area, Aktaia Odos, is the only part of the city where construction of high-rise buildings is allowed. “In five to ten years this will be our new riviera,” Flourentzou says. Prices at Limassol Blu Marine start from €650,000 for a one bedroom flat, €1 million for two bedrooms and €1.275 million for a three bedroom apartment.
Most of the homebuyers here come from the former USSR or Israel. I ask Flourentzou if there are any Cypriot buyers. “No. Most of them can’t afford it,” she says candidly. “Also Cypriots have this tradition that they give their sons a piece of land to build their own house. They prefer to live in the countryside.”
Another thing they have in common with the Brits. And on an island with up to 340 sunny days a year, who can blame them?
Properties for sale
Kamares Village is an exclusive Leptos Estates development in Paphos. It is nestled on the hills, with breathtaking views of the countryside and the coastline, and is a short drive from the Minthis championship golf course. The development is characterised by delicate stone arches, or kamares, landscaping and traditional stone work. Each villa is individual in character and includes bungalows, and split-level and two-storey homes. Each property comes with stylish kitchens, hi-tech designs, private pools and outside areas. Community life revolves around the events of the Kamares Club.
Prices from €440,000 for a two-bedroom villa to €5,768,000 plus VAT for a five bedroom villa; https://www.leptosestates.com/project/kamares-village
Limassol Blu Marine
Each apartment at Limassol Blu Marine offers open-plan living, with large balconies, premium specification and interior finishes with smart home technology. Residents will also be able to take advantage of the elevated podium over the sea, which will host a spectacular 50m infinity pool, landscaped gardens, a double-height gym, a bistro and a lobby with 24-hour concierge.
One-bedroom apartments are from €655,000, two-bedroom apartments from
€1,065,000 and three-bedroom apartments from €1,275,000;Limassolblumarine.com
Coral Seas Villas
Coral Seas Villas is set in an exclusive gated development, offering state-of-the art seafront properties. The 63 homes are situated in the most sought-after area of Paphos, most featuring private swimming pools and within walking distance to the Mediterranean Sea.
Prices from €690,000 plus VAT for a three-bedroom villa to €3,399,000 plus VAT for a five-bedroom villa; https://www.leptosestates.com/project/coral-seas-villas