Why are investments in Northern Cyprus real estate considered a risk or a profitable investment?

Control and status of Northern Cyprus

Since 1974, the northern part of Cyprus has been under the control of the Turkish armed forces, and in 1983, the Turkish Republic of NorthernCyprus was proclaimed here. The issue of housing availability in this part of the island has both positive and negative aspects.

Advantages and disadvantages of choosing housing

Positive aspects include:

• Relatively low real estate prices.

The negative aspects include:

• The lack of security guarantees for investors regarding their investments.

Analysis of housing prices in Famagusta

To understand how much prices for residential properties vary in the northern part of Cyprus, it's important to focus on one of the major cities in the region — Famagusta. For example, a villa with an area of 234 square meters, located a hundred meters from the sea, is valued at320 thousand dollarsThis is comparable to the price of a standard apartment in Moscow.

By doing some simple calculations, one can see that the cost per square meter in such a villa is approximately1370 dollarsHowever, if you move further away from the sea, for example, half a kilometer, the price per square meter significantly decreases, reaching less than1,000 dollars..

For example, a house with an area of 215 square meters, located six hundred meters from the sea, is offered for just200 thousand dollarsthat corresponds to the price930 dollarsper square meter.

Prices for new apartments

A similar situation is observed in the market for new apartments. For example, a newly built three-bedroom apartment with an area of 140 square meters costs160 thousand dollarswhich leads to a cost of about per square meter$1,430..

If you buy an apartment in a building under construction that is expected to be completed within a year, the price per square meter may drop to900 dollars.

Comparison of prices with the Greek part of Cyprus

At the same time, real estate in the Greek part of Cyprus is significantly more expensive. For example, a luxury villa with a pool in one of the most prestigious areas of Limassol, which is the second largest city in Cyprus with a population of about180 thousand people, it's worthone million Cypriot poundsApproximately2 million dollars).

This villa has an area of 300 square meters, which makes the cost of one square meter approximately6700 dollarsEven considering the use of high-quality materials for its construction, it's hard to explain such a price difference between the northern and southern parts of the island solely by the quality of the building materials used.

Apartment prices

The price comparison for apartments also shows significant differences. For instance, a similar-sized apartment in a new building on the Greek side costs580 thousand dollars...which means that the cost per square meter is...4143 dollars— this is in2.9 times more, than in the north.

In addition, the average price per square meter in the secondary market of the southern part is about3200 dollars.

Conclusions for potential buyers

Thus, the differences in property prices between the two parts of Cyprus remain quite significant. Potential buyers should carefully analyze all aspects before making a purchasing decision.

Eastern Cyprus: the interests of profitable investors

What attracts foreign investors to the southern part of Cyprus more than to the north? The climate and sea conditions in these areas are completely the same. However, according to Dmitry Vasiliadi, co-owner of the company "Lefkosia Real Property," the key factor in the attractiveness of real estate in southern Cyprus is the stable price growth, which fluctuates within a certain range.15-20%per year. It is expected that after the introduction of the euro, the cost of residential real estate may increase even further.

Advantages of Southern Cyprus

Margarita Kotua, who holds the position of director at "Viriko Developers," notes that a distinctive feature of Cyprus is the absence of noticeable poverty and a low crime rate. An important factor is that this island is part ofEuropean UnionThe city of Limassol is gaining increasing popularity due to its image as one of the most cosmopolitan and open cities in the Eastern Mediterranean.

• Limassol was inhabited by Turkish Cypriots until the division of the country.
• After Turkey's involvement in the military actions, many left the southern part and moved to the north.
• In the 90s, many returned to Limassol, as the standard of living in the south turned out to be significantly higher.
• Today, the gap in quality of life between the two regions has become less noticeable.

Disadvantages of Northern Cyprus

Despite this, European investors are hesitant to invest in real estate in Northern Cyprus. The reason lies in the fact that the Turkish Republic of NorthernCyprus is not recognized by any country in the world except Turkey. Investing in this area is considered quite risky. As noted by Konstantinos Andronakas, an analyst at Strategos, such investments seem absurd.

“In a civilized world, no one can guarantee the safety of your funds in a region that is not on the political map.”

On the international stage, there is indeed no country by the name of Kuzey Kıbrıs Türk Cumhuriyeti. This region even lacks its own currency, as transactions are conducted using the new Turkish lira, which was introduced in 2005. All foreign economic activities, including communications, are carried out through Turkey. For example, using the Turkish telephone code is mandatory for international calls.+90 392...while the internet resources of Northern Cyprus have a second-level domain..nc.tr, which is managed by the Turkish top-level domain.tr.

In addition, the correspondence is sent through the city of Mersin, which complicates the processes compared to other regions. The seaports of Northern Cyprus have been closed to all vessels since Turkey's invasion in 1974, making access to this region difficult.

Conclusions

Thus, the attractiveness of Southern Cyprus for investors is shaped not only by economic stability and its legal status within the European Union but also by the overall quality of life, which appears more favorable compared to the northern part. Together, these factors create an image of Southern Cyprus as a more preferred investment location, while the north continues to carry high risks of both economic and political nature.

Issues of citizenship status

When it comes to the civil status of residents of Northern Cyprus, they may face difficulties when planning trips to the Republic of Cyprus or Greece. The privileges and benefits that Cyprus enjoys as a member of the European Union apply only to the Greek part of the island.

Conclusion

In conclusion, it should be emphasized that the real estate situation in Northern Cyprus evokes contradictory feelings. On the one hand, affordable housing prices, especially compared to neighboring Greek Cyprus, may attract the attention of potential investors and buyers. This creates opportunities for those seeking to purchase real estate on the sunny island at a more reasonable cost. However, on the other hand, the high level of risk associated with the lack of international recognition and guarantee of investment security makes this choice rather controversial.

As the author of this article, I understand that investing in real estate is a serious step, and it is especially important to consider not only the financial side, but also the political aspects. It should not be forgotten that every transaction requires careful analysis, including the possibility of changes in the political environment that may affect the market.

Why Greek Cyprus is more attractive

In addition, Greek Cyprus remains in many ways more attractive to foreign investors due to its stable economic situation and membership in the European Union. Given that the real estate market here is steadily growing despite higher prices, this creates additional advantages for those who are looking not only for housing, but also for a reliable investment instrument.

Important aspects for investors

• Market analysis:each individual investor should carefully weigh the pros and cons.
• It's a situation:the political environment affects the market and investment opportunities.
• Financial Aspects:need to consider not only cost, but also potential growth.

Ultimately, this is the only way to safeguard ourselves and our investments in the future. The current economic and political situation requires us to take a careful approach to any investment decisions, especially in sensitive regions such as Cyprus.