Drive along the newly tarred motorway in Cyprus, with the sparkling Mediterranean on one side and scrubby green hillsides on the other, and your view is punctuated not by herds of goats or Greek Orthodox churches, but by hoardings advertising properties for sale.
Sun-bleached images of pastel- coloured villas set around swimming pools are selling the dream: a cheap house on a sunny island, where prices are 30% below those in Spain.
Over the years, Cyprus has built up something of a “chic as chips” reputation, a result of the boom in package holidays that has left much of the island’s coastline scarred with lines of concrete hotels and apartment blocks, Irish theme bars and fast-food restaurants. But Cyprus, the largest island in the Mediterranean, is already moving upmarket — and the government believes that “residential tourism” will provide the best way forward.
According to the Cyprus land registry, 12,000 British people, constituting 1.5% of the population, already own homes on the island — the same proportion of Brits who own properties in France. The British have been buying on the southern half of Cyprus, especially near Paphos, for 20-30 years, but the past two years have seen them moving further afield, to Polis, north of Paphos, and to hillsides with sea views near Limassol on the southern coast and near Larnaca, in the east, where prices are up to 30% cheaper. Interest from well-heeled British buyers will be key to the success — or failure — of the attempt to push Cypriot holiday homes upmarket.
Work has started on the expansion of Paphos airport, and there are plans to build 1,000 berths at the Coral Bay Marina, to help tempt wealthy yachtsmen. Last year the government also launched a new golf policy, which could increase the number of 18-hole courses on the island from three to 14. At Aphrodite Hills, one of the biggest new housing developments trying to woo a richer clientele, about 60% of homeowners are British, says Loucas Kitrou, the real estate manager, but “only a third of them play golf”. They are buying by the greens and alongside the fairways because, as Kitrou says, golf “adds as much as 40% to the value of a property”.
A self-contained resort just 20 minutes from Paphos airport, Aphrodite Hills is set in 578 acres, and when it is finished in 2008, it will have a total of 650 properties. It also has an InterContinental hotel, a tennis academy and a “village square”, surrounded by cafes, restaurants, a chemist, a shop and a church.
In 2000, when the resort was nothing but bare earth, you could buy a three-bed townhouse for £83,500-£95,500 (and that’s sterling, not Cypriot pounds). A similar property now costs £240,000. The penultimate phase of the development, Zephyros village, was launched last month, with villa prices starting at £690,000 and rising beyond £1.1m for a four-bed property with a private pool.
“Prices have gone up a lot, as has the calibre of client,” says Kitrou. “If you can pay £955,000 for a villa, then you are willing to spend more on the extras, like a built-in barbecue area. We created the market on the island.”
Part of that market includes self-build. Planning laws in Cyprus are strict, permitting only 10% of a plot to be built on. Designs are limited to a few colours and are encouraged to echo the traditional style of hillside villages, with red-tiled roofs and hardwood window frames.
For this reason, a number of British buyers, including Peter Dyoss, a financial director, have taken advantage of the existing planning permission and infrastructure at Aphrodite Hills to build their own homes there. Dyoss has bought two plots, on which he has built one large villa, using his own architect.
“I could see that the quality of civil engineering — the roads, the sewers, and so on — was better than what I’d seen elsewhere on the island,” he says.
Dyoss, 67, and his wife Angela, 62, who live near Bournemouth, have spent the past 18 months building a 3,500sq ft villa at the Cypriot resort at a cost of £537,000. It has four bedrooms, a walk-in wardrobe in beech wood, a study, a large infinity swimming pool and an underground garage.
“You still have to build in a similar style to fit in with the resort, but this way I got a bigger villa,” says Dyoss. “Paying for my own architect added 6.5% to the costs, including a pool designer and a quantity surveyor, but this way we also got more choice when it came to the layout, tiles in the bathroom, wood floors and so on. The quality is very good over here and 15% cheaper than in the UK.”
The developer, Lanitis, has submitted plans to build two more resorts, one near Pissouri — a pretty seaside village midway between Limassol and Paphos — whose population is already 70% British, and the other closer to Limassol.
Across the gorge from Aphrodite Hills, the island’s largest developer, Aristo, is building the Secret Valley golf resort, set in a 2,500-acre nature reserve. If permitted, the company will build up to 1,500 apartments and 1,500 villas over the next seven to 10 years. Flats will start from £240,000 and go up to £1m-plus for a custom-built villa.
“Golf is the way of the future,” says Themis Mavromichalos, sales director for Secret Valley. “But we are also building an Olympic-sized swimming pool and a tennis and squash academy.”
Property prices on Cyprus have been rising at about 20% a year since the island joined the European Union in 2004, but can such growth be sustained? Stuart Law, managing director of Assetz, a specialist property investment firm, believes they can, at least in the short term. “Prices are still considerably lower than in France or Spain — as much as 30% less,” he says. “Prices rose by 15% in 2005, and I expect the same this year. Entry to the euro in 2007-08 will pre-empt further growth.”
Etychia Christodoulou, general manager of Lordos Properties, says: “Cyprus is no longer cheap. It used to be popular with retiring couples, but now we are seeing more families. The buyers are getting younger.”
Lordos Properties started out renovating old stone houses, but Christodoulou admits there are few left now. The firm is building 150 properties across the island, and is starting to break into markets at Ayia Napa and Protaras, where developers are testing the water hoping to appeal to the British “value for money” market. Prices at Lordos Sunrise Beach Villas on the seafront at Protaras start at £187,000 for a two-bed villa and £235,000 for three-bedrooms and a private pool.
Lordos is also starting to convert some dated and now half-empty hotels along the coast into furnished apartments, such as the Ermitage on the seafront at Limassol. These flats have laminated floors, stainless-steel kitchen appliances and plasma television screens. The penthouse just sold for £1.2m.
The buying process in Cyprus is relatively straightforward. It is advisable to visit the island independently, rather than allow a developer to fund your trip, so that you can visit your choice of agents and areas.
Chris Wilkinson, 63, and his girlfriend, Jane Davis, 47, had been visiting the island for 15 years before they decided to buy. “We were mooching around and came across the most beautiful site,” says Wilkinson, who runs the Mullion Cove hotel in Cornwall with Davis.
Planning permission for the 100-acre site, sold off by a local farmer, allowed only eight building plots. Four of them, including Wilkinson and Davis’s, have been built on, while the remaining four properties are still under construction.
The couple bought their plot, 600ft above sea level, behind the Coral Bay Marina north of Paphos in 2004. Wilkinson estimates the villa, with its 180-degree sea views, cost just under £597,000, including landscaping and a pool.
Wilkinson and Davis are proud of their achievement but are selling up, as they feel the four-bed property and its Ç-acre plot are too much to look after. They are selling the villa themselves for £780,000, to take advantage of the booming market, but plan to stay on in Cyprus.
“There is a colony of Brits here,” says Wilkinson. “But it is easy to avoid the overbuilt areas. You can still find the old Cyprus, with small squares and tavernas, where the ladies are dressed in black.”
On the market
Near Tsada, a 20-minute drive from Paphos airport, this five-bedroom, four-bathroom villa at Olympus village is for sale at £1,884,000 through Leptos Estates, 020 8883 2333, www.leptos.com.cy
For sale for £830,000, this four-bed villa in Kissonerga, just outside Paphos, has three reception rooms, a staff flat and a private pool. It is for sale with Unique Living, 0845 430 0185, www.uniqueliving.com
At the Secret Valley golf resort, this three-bed, two-bathroom property has sea views. It is being sold fully furnished for £390,000 through Savills, 020 7016 3740, www.savills.co.uk/abroad
This three-bed villa with sea views in a gated scheme at St George Hills, near Paphos, is due to be completed in 2009. It is £300,000 from Alpha Panareti, 01743 354 393, www.stgeorgehills.com
Properties at Aphrodite Hills are for sale with Knight Frank, 020 7629 2639, www.knightfrank.com; Wilkinson and Davis’s villa is for sale through www.cyprus-home.org.uk; Lordos Properties, 020 7431 9900, www.lordosproperties.com
