Brexit & Cyprus – What Next?

Brexit and Cyprus

Brexit and Cyprus – What next?

Here we go again! Cyprus facing another crisis – or are we? Anyone in Cyprus can tell you how vital the UK is to our economy and especially the property market. As you can imagine, the result of the UK referendum is not good news for us, on the basis that the majority of our clients are from the UK.

Since “Brexit” was an unprecedented event many are taking a wait and see approach. There are many people saying that Brexit will not actually happen especially since the way the market, as well as the GBP has taken a serious dive since the vote – the lowest against the USD in 31 years.  Many claim that they have been misled by the “leave leaders” and want a second referendum.  The UK will now invoke Article 50 of the Treaty and some think the UK parliament will not vote to allow the UK to leave OR the second referendum mentioned might take place OR the Scottish government might veto the bill and not allow the UK to leave. As you can see, there are many unknowns in the bigger picture and as a local business in Paphos so far we have noticed a decline in website traffic and prospects interested in buying homes in Cyprus.

One of the big concerns for the British planning to retire in Cyprus is what will happen with the health system and pensions. Others worry if working and living in Cyprus will become more complicated and if they will still be able to afford it. Whilst I realise that the UK will be negotiating over the next few years in many different areas and we are not going to see a mass exodus of British from Cyprus, but rather a slow decline depending on what happens next. Tourism in Cyprus relies on the British and the property market is made up of 35% British. The uncertainty of the situation has already been felt in local businesses and  here are a couple of comments concerning Brexit that we have received since the referendum:

Hello Cleo
Hope this email finds you well. Thank you very much for keeping me updated on this property.
I am still interested but recent events with the U.K. Referendum has meant that I will probably hang on a for a while longer to see what happens before purchasing a property.
I am coming on 13th July so I may contact you for a viewing in case the economic situation changes.
I would appreciate it if you could continue to keep me updated on this one as I do like the property.
Thank you again Cleo
Kindest regards

XXXXXXXXX

Cleo

We are desperately distressed that due to the economical outcome of brexit we are not in a position to go forward with our proposed purchase of the bungalow at the moment. You have both been extremely attentive and helpful with all our enquiries,and can’t thank you enough. We are coming over on October 7th on a holiday to Coral Bay so if things settle down perhaps we could see u then. We are sorry if this has caused yourselves or the owmer of the bungalow any distress but we were genuine and serious about a purchase.

Best wishes and Regards

from XXX and XXX

One thought on “Brexit & Cyprus – What Next?

  1. I read with interest the replies on this page.
    I too am interested in purchasing property in Cyprus, but I am open minded and have to make a decision on choice between two other countries (Chile and Costa Rica).
    I’m not in a hurry at the moment, as I have an ailing parent to look after in the UK, before I can take action, but I am acutely aware of how precarious the banking systems in Europe, the USA and the UK are.
    As far as Brexit goes, we have a considerable length of time before we are truly detached from Europe (two years). That said, we are already seeing that the announcement of Brexit has NOT sent Britain into a spiralling decline, instead strengthening the economy. The pound, recently, has strengthened too and currently obtain €1.19 to £1.
    I expect some additional Improvement in the exchange rate It is, of course, a lower exchange rate than it has been historically, but the cost of living in Cyprus is substantially less than the UK – even less if you live in a UK city.

    What is a major concern is the stability of the EU and the Euro! The EU is in serious debt and I really do not think the EU will last much longer in its current format, in fact it’s highly likely to completely collapse, especially with other countries wishing to exit. The Euro will certainly perish too, which will mean countries will have to revert back to individual currencies. This will initially be a problem, as the Cypriot banks may crash along with the Euro and cause problems with expats needing to withdraw money, but in the long term, it would be an advantage to British people, as the British pound (thank God we never joined the Euro) would have considerable strength.

    On another note, I have an Israeli friend who says there has been a recent increased interest in Cypriot property from Israeli citizens, as the cost of living in Israel sky rockets, along with a very strong Israeli Shekel.

    So all is not lost for Cyprus and whilst there may be a downturn in home sales at the present time, I suspect that will reverse in the next two years. So long as Cyprus maintains a cost effective and good standard of living, it will continue to attract expats, especially with sunshine, sea and mountain views, beaches and good food it has to offer along with its wonderful people!

Leave a Reply

Your email address will not be published. Required fields are marked *