Northern Cyprus – the pros and cons of buying real estate in an unrecognized republic

As 2022 progressed, the global real estate market experienced a kind of reassessment of values ​​and a change of priorities, which was caused by a number of circumstances. As a result, investors began to increasingly pay attention to very controversial areas that previously were not in particular demand among a wide audience. One of them was Northern Cyprus, an unrecognized republic on the Turkish part of the island, the volume of real estate investments in which has grown sharply over the past six months.

Previously, Northern Cyprus, whose independence is recognized only by Turkey, was of interest to a rather narrow circle of foreigners who were primarily looking for budget options for vacation housing, but now the number of purchase and sale transactions has increased significantly. The greatest activity in the local real estate market in 2022 will be demonstrated by citizens of Russia, Belarus and Ukraine. If Russians and Belarusians reoriented to Northern Cyprus due to problems with buying housing, making bank transfers and obtaining residence permits in EU countries, then Ukrainians consider this country as a “safe haven” located at a decent distance from the sites of hostilities. In turn, there are many more buyers from the USA, Great Britain and EU countries, who are attracted by a loyal tax policy and confidentiality of transactions, information about which is not transmitted to other countries of the world.

In 2022, more and more foreigners are considering buying property in Northern Cyprus not as a profitable investment (although prices are rising by 10-15%, and somewhere around 20% per year), but as an option for moving to a permanent place of residence. Based on this, they are not interested in “vacation real estate”, but in the availability of opportunities for employment, running a business and educating their children. However, such opportunities still exist only in very, very few cities: in Famagusta, Iskele and Kyrenia, where the infrastructure is quite well developed and there are private English schools, with certificates from which you can enter European universities.

In other cities, there is still no talk about a present rich in cultural and other events or any prospects for the future, and they are only suitable for very unassuming “digital nomads” or freelancers working remotely, and pensioners who dreamed of a budget vacation on the sea coast with good ecology. It is no coincidence that in 2021, the prestigious Forbes publication named Northern Cyprus (in particular, Iskele) the location with the best resort real estate in the world.

The cost of housing in Northern Cyprus starts from 40 thousand euros for a studio in a residential complex under construction by the sea, an apartment with one bedroom will cost from 50 thousand euros, with two – 70 thousand euros, and a separate house for one family will cost at least 100 thousand euros. It is real estate in this price segment that is in high, if not frantic, demand (many developers simply do not have time to produce buildings), and it is becoming increasingly difficult to find interesting options.

It should be borne in mind that, unlike Turkey and many EU countries, new apartments and houses in Northern Cyprus are usually sold without furniture and household appliances. The main disadvantage of “resale” is that it will be very, very difficult to sell it against the backdrop of new buildings made of modern materials, having a much more convenient layout and additional amenities (swimming pool, recreation area, etc.). Accordingly, it will be more difficult to rent out such real estate, since in addition to the Turks, the main clients are citizens of Great Britain, Germany and France, who are ready to overpay for comfort.

Obtaining a residence permit in Northern Cyprus is now easier than in Turkey, not to mention the Greek part of the island. To do this, it is enough to buy residential property suitable for living, without any restrictions on the cost, paying at least a third of it. Local developers easily provide interest-free installments for up to six years and on more favorable terms compared to Turkey. However, a residence permit in an unrecognized republic does not provide any special preferences, with the exception of the right to continuous stay on its territory for a period of more than one month (in some cases, three), and it will not be possible to get to the Greek part with it without a valid Schengen visa. To obtain it, you will need to return to your country, which leads to additional waste of time and money.

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