A few weeks ago I shared some of my first impressions of Cyprus, and since then we’ve put the reservation down on our future condo in North Cyprus. I’m no property expert, but even I saw the potential of each of the markets we looked at on the island. Lief Simon, however, is a global property investment expert, and he shares his insights on the market with us below…
Cyprus’ Top Emerging Real Estate Markets
In Northern Cyprus, buying almost any property will lead to excellent returns from cash flow, appreciation, or both…The north side of the island represents 36% of the land area, but due to the geography of the island, with a long peninsula on the northeast side, it has more than 50% of the coastline. This affords Northern Cyprus several distinct coastal areas to look at: East of Kyrenia (Girne), West of Kyrenia, and two parts of the Iskele area—Long Beach and a designated resort area near Bafra. Each of these four areas have different features, but all are attracting tourists in search of rental properties.
The path of progress from the town of Kyrenia is east along the coast. This side of the island has a mountain range running parallel to it that drops to the shore opening up small contained beaches in coves. The terrain allows for ocean views from most every property built. Add in strict permitting rules in this part of Kyrenia that restrict building heights to three stories and forbid new construction within 100 meters of the coast, and you are guaranteed a coastline that won’t be overrun by high-rises that would obliterate current views.
-The Iskele Area
North of the Long Beach area is a development zone for resorts and casinos near the town of Bafra. The area had been previously described by the real estate broker, Dengiz, that we’ve been working with the last two years, but it wasn’t until driving in that it struck me that this area is very similar to Cancún, Mexico. Starting out as a patch of sand on the Yucatán Peninsula in the 1970s, the town has grown into a global tourist destination with large beach resorts, a major shopping strip, and its own international airport serving the entire region with flights from around the world and direct flights from most major cities in the States.
Not that this Bafra area is going to turn into Cancún overnight… nor is it likely to become as big as Cancún. However, the key similarity right now is that, like Cancún being targeted by the Mexican government for development, Northern Cyprus has targeted and designated this area for resort tourism. Fourteen resorts will be built along the coast here; five are already built and operating.
-West of Kyrenia
The last area of interest in the north for me, despite not being able to visit it this trip in person, is the west side of Kyrenia. South of the mountain range is yet another long beach in a flat area on the west coast between the Kyrenian and Troodos mountain ranges. This is an agricultural area of the island due to the fertile flat fields. However, the beach area has been mostly ignored to date. One developer has started a large project for medical services that will include apartments for short-term renters recovering from surgeries, cosmetic and otherwise. In any of these four regions you can still find properties for under US$100,000. You can also find million-dollar-plus villas on the ocean that would cost multiples of that on the south side or anywhere else in the Mediterranean. The bottom line is you can get solid value for money as my Irish friends would say. Rental return projections for some new projects are pushing into double digits using pre-pandemic occupancy rates. With current occupancy rates still working their way back to the pre-pandemic numbers, you’re still looking at 6% minimum net yields for the most part. So where is the opportunity for an individual real estate investor? Join us for a webinar with Cyprus real estate expert, Dengiz, to find out… Lief Simon Editor, Global Property Advisor