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Will the Euro boost?

The most exciting news to come out of the Greek Cypriot property market recently is the government's adoption of the euro on January 1, 2008.

Although the new currency hasn't been welcomed with open arms by everyone in Cyprus, many agents predict it will give the local market a significant boost.

Prices are already rising healthily at around nine per cent a year, compared to five per cent the year before. A closer look at the Cypriot market shows that the rush to buy land before the 15 per cent VAT on land purchases kicks in on January 1 - plus low interest rates, the arrival of several budget airlines and a shortage of property for sale - have also helped to spur on property prices in southern Cyprus of late.

It also helps that many Brits have a soft spot for Cyprus. And that's hardly surprising considering that this Mediterranean isle has the complete summer holiday package.

Friendly locals, sandy beaches, stunning scenery and over 300 sunny days per year all combine to make this something of a holiday gem. All of which explains why so many of us are looking to Cyprus for our place in the sun.

Although the majority of overseas buyers still come from the UK, other nations are beginning to get a foothold on the Cypriot property ladder. "Since its accession to the EU, in 2004, more countries have become aware of where Cyprus is and it has brought new purchasers from other countries," says Anita Hopkins of Leptos Estates.

"Cyprus now attracts investors from the Middle East and other European countries." And with recent changes in VAT legislation (15 per cent on new properties), the market for VAT-exempt properties in particular is hotting up.

"Many properties in Cyprus are still available without VAT - all properties filed for planning prior to May 2004 are exempt - and therefore purchasers are buying before the prices rise," says Hopkins. She believes that there are several reasons why Cyprus should prosper. "The property market will continue to grow due to many factors. Purchasers like the legal system in Cyprus - it is easy to understand being based on the English one."

"The Cypriot Government also believes in looking after the environment - properties cannot exceed a certain height, density is monitored and green areas are planted within developments" says Hopkins.

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