Investment income

One of the main reasons for buying property, overseas in particular, is an opportunity to generate income. Foreign buyers have discovered Northern Cyprus, and there has been a great demand for property here for a few years.

Most often foreign property buyers are interested in the following:

  1. the dynamics of price growth
  2. income from property investment
  3. rental income and the types of rent in Northern Cyprus

1.The dynamics of price growth

Steady growth in tourist flow (2018 – about 1,734 mln. tourists, 2012 – 400,000 tourists), sustained demand for property as well as the lack of new housing units have led to the increase in real estate deals, and, as a consequence, increase in prices for residential property.

The chart shows how the value of residential property has changed over the last 6 years:

the price growth (at the construction stage) in Northern Cyprus – average growth per annum in pounds sterling.

Due to stable price growth, the resale of new property in Northern Cyprus brings substantial income (often in a short period).

2 .Income from property resale

The most profitable type of investment is the purchase of property at the construction stage, currently, the annual growth of the property value is 10-12% on average. Depending on the investment period the resale proceeds can reach the mark of 50% (when investing at the zero stage of construction).

In Northern Cyprus the resale takes place at the construction stage and even before the full repayment of the purchase price.

The changes in prices for a studio apartment during the construction period (from the initial stage of construction till the completion stage).

Декабрь 2015 - старт продаж
2016 год
2017 год
Сентябрь 2018 - сдача объекта
2019 год
27 тыс евро
30 тыс евро
35 тыс евро
40 тыс евро
45 тыс евро
+13 000
+48%
+18 000
+66%

 

3.Rental incomeу

Rent prices in Northern Cyprus are growing as well. In Famagusta, for instance, rental rates have increased by 28% on average for the last 3 years.

There are the following types of rent in Northern Cyprus:

Long-term rent is more common for city property, where there are a lot of big universities*. The city property in Nicosia, Famagusta, Kurenia is rented out quite well. The tenants are mainly students (there is a lack of dormitories; moreover, often it's cheaper to rent a flat as the dormitory fees are quite high).

The income from long-term rent is 6-7% per year on average, but it also has some advantages. First, rental contract is concluded for at least a year. Second, an advance payment is usually made for 6 months or even a year.

*FYI. More than 100,000 foreign students study in Northern Cyprus universities annually.

A long-term rental income in Northern Cyprus (Famagusta, Kyrenia)

Тип квартиры
Средняя стоимость аренды/месяц, фунты
Средняя стоимость аренды в год, фунты
Средняя стоимость квартиры, фунты
Доходность от аренды в год, %
студия
250
2750
40 000
6.8
1+1
300-350
3300 - 4100
50 000
6.6
2+1
400-450
4400 - 4950
60 000
7.3
3+1
450-500
4950 - 5500
80 000
6.1

Short-term rent is more common for holiday property. It's popular during the tourist season, which is one of the longest in the Mediterranean. A short-term rent is calculated and fixed per one day. The rental prices vary depending on the season and reach the highest mark during the so-called high tourist season, which lasts from May to October (6 months). But owing to the local climate, there are a lot of tourists in April and November as well.

For getting the most of your rental property, you should choose up-to-date seafront complexes with a well-developed infrastructure.

Short-term rent is the most profitable rental option . In this case, you can earn much more from short-term rent in high season than from the yearly long-term rent in the city. An average income in this case is 10-12% per year. Sound management coupled with great location and high quality of the complex can make the rental income reach the mark of 14% per annum.

A short-term rental income in Northern Cyprus (Long Beach region)

Тип квартиры
Средняя стоимость аренды/сутки, евро
Средняя стоимость аренды 6 месяцев, евро
Средняя стоимость квартиры, евро
Доходность от аренды в год, %
студия
45
5 400
41 000
13.1
1+1
50
6 000
55 000
10.9
2+1
60
7 200
68 000
10.5
3+1
95
11 400
91 000
12.5

Guaranteed rent is also a great option for holiday property. This type of rent is provided by many property developers in Northern Cyprus. The income from guaranteed rent varies from 6% to 8% per annum (depending on the project, property type and developer).

This rental option is great for those who want to avoid the hassle of addressing any rent-related issues (property maintenance, looking for tenants, rent collection, etc.). You just surrender your apartment to the management of the company.

To sum up, we can say that currently, the real estate market in Northern Cyprus has a great potential for sustainable growth and thus provides great investment opportunities.

When choosing a particular project, you should clearly specify your requests to choose an income-generating instrument that is most suitable for you.

OOO “Novyj Dom dlya Vas” will gladly assist you in a comprehensive resolution of any issues and tasks related to buying real estate in Northern Cyprus.