For Britons searching to buy an affordable bolthole with year-round sun, Cyprus is high on the list, and on a grey day in February it is clear why. It’s four and a half hours away by air and is hot, hot, hot. The temperature does not drop below 15C, even in winter, and you can sunbathe for nine months of the year. It has Mediterranean food, advantageous tax laws and English language radio stations.

Northern Cyprus has proved most popular in the past, with prices around 60 per cent cheaper than in the southern half of the island. But an ongoing court case that could jeopardise ownership rights to land here has dampened interest. Buyers are now looking further south but the drawback is the effect that mass tourism has had on its reputation. Package holidays and ugly resorts have blotted the landscape and have put off richer buyers. But what it does have is a wealth of history. Archaeological sites include the Tomb of the Kings and mythical spots such as the Baths of Aphrodite, and clifftops on which Cleopatra supposedly prayed.

The area around Paphos is fashioning itself as the luxury end of the island, providing opportunities for investors searching for something smarter. Wealthy visitors from the Middle East, Russia and Scandinavia are buying here, and a new marina development at Coral Bay, along with a new terminal at Paphos airport, will boost the number of sophisticated developments that are springing up along the coast and in the hills.

The smartest addition to this western tip of Cyprus will be at Cap St Georges, between Paphos and Akamas, where 50 modern villas will soon stand overlooking the sea. The project is the brainchild of Georges Andraos, a Lebanese architect who now lives in Richmond, west London, and has gone on holiday to Cyprus all his life. His Cypriot business partner owns several plots of local land and small tourist attractions. Their show home features open-plan living rooms with panoramic windows opening on to seaview terraces. The olive press in the back garden is impressive, as are the futuristic showers with blue lighting, centralised light, heat and sound controls and clever diagonal windows in the upper sitting room.

Andraos, who has designed individual homes for wealthy patrons all over Europe, is big on Zen style and outdoor living. His aesthetic is clean and modern but relaxed, integrating the outdoor terraces and indoor spaces simply and smoothly. The gardens are split level and angular with rectangular fountains and swimming pools that have dramatic glass walls. The villas, which come in seven styles and with three to seven bedrooms, are costly compared with most Cyprus properties — between €2.5 million and €8.1 million (£2.2 million-£7.2 million)— but are also significantly slicker. There are saunas, wine cellars, gyms and home cinemas. Work is scheduled so that each villa is finished 20 months after the sale is agreed.

The development faces a real test, however, as international buyers hesitate to invest, although recent reports from the Cypriot property market claim that the island has escaped the credit crunch. During the last quarter of 2008 the Cyprus property market experienced a fall of just 1.6 per cent, according to the Knight Frank Global House Price Index, against a decline of 5.1 per cent for the UK market over the same period.

In November, Charilaos Stavrakis, the Cyprus Finance Minister, predicted 3.7 per cent growth for the Cypriot economy during 2009, most of it generated by tourism. The low tax regime and the absence of inheritance tax makes it attractive for investment but the rash of advertisements for cheap flights suggests that the London to Larnaca route may be currently underused.

Cap St Georges sells itself as a luxury beach club that will be well-placed to make the most of the upmarket tourist influx. There will be a clubhouse for members and guests, a restaurant, spa and concierge service. Sand will be imported to enhance the small bay while hilltop restaurants serve simple fare under dense vines. There are three championship golf courses, and moorings are available at the new 1,000-berth Coral Bay Marina.

Andraos says he has created a haven where high-flyers can escape. “You can do yoga or you can have a wild private party here. It will be high-tech and modern but also close to the natural world.”

Savills International , 0207 016 3740; www.capstgeorges.com

Times recommends

• Second homes: credit crunch casualty or money-spinner?
• How I built my own sliding house
• Top 10 incentives for house buyers