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Ayia Napa set to become property hotspot September 6, 2006

Posted by grhomeboy in Cyprus Ayia Napa.

Ayia Napa is not the first place that springs to mind when it comes to overseas property hotspots.

The Cypriot resort has, during the last 10 years, been associated with a burgeoning UK Garage music scene and hordes of drunken Brits on 18-30 holidays.

But Ayia Napa is reinventing itself and is now becoming a serious prospect for investors looking to buy property in Cyprus, according to investment firm Assetz.

The authorities are clamping down on loud music and typical 18-30s antics as the resort transforms into an upmarket holiday destination.

Now, nightclubs and bars that play loud music into the early hours are immediately closed down and their equipment confiscated.

The move to rid the resort of its downmarket reputation is attracting more families with children and more upmarket holidaymakers, and facilities to cater for them are springing up.

There are plans to build three golf courses and two huge marinas that are capable of berthing large yachts, with the aim of turning Ayia Napa into the ‘Monte Carlo of the Middle East’.

Moira Augusti, a resident of Ayia Napa for nearly a decade, said of the change in the resort: “Several years ago, Ayia Napa was a club haven for the young, it was extremely noisy and there was always trouble. There is now a dramatic change. The streets are occupied by families with children eating ice creams and young couples walking hand-in-hand, rather than young drunken clubbers.”

So why should this interest overseas property investors?

To start with house prices in Cyprus have risen by about 15 per cent in the last 12 months, but in Ayia Napa, along with neighbouring Protaras and Paralimni, prices have risen by an additional five per cent.

The poor reputation of Ayia Napa also means that house prices are considerably lower than in the rest of the island, meaning there is room for growth as the area regenerates.

Currently, a penthouse apartment of about 80 to 90 square metres, with a 50 square metre terrace area 300 yards from the beach, with on-site swimming pools, tennis and shops would cost about £110,000 sterling.

An equivalent property at the other end of the island would cost between 30 per cent and 40 per cent more, at about £145,000 to £155,000.

“As the higher quality holiday companies move into Ayia Napa and the world-class golf courses and marinas for business, the potential rental income for investors is significantly improved,” said Assetz managing director Stuart Law.

“They will also benefit from house price growth which is likely to be higher than the rest of the island as the upmarket tourist trade continues to develop.

“When Cyprus adopts the euro in 2008 it will have to decrease interest rates from the current 5.5 per cent to the much lower euro rate, making borrowing cheaper, which is likely to further strengthen the property market.”

All in all this makes Ayia Napa a far more attractive prospect for overseas property investors, particularly those looking for property in Cyprus, than its erstwhile downmarket reputation would suggest.

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