Continuing our series on the specific aspects of life in the context of buying property in the Turkish Republic of Northern Cyprus (TRNC).
What's important to know for those looking to acquire property in the TRNC? Here's a brief overview of some key points not covered in previous articles.
Content:
- The less obvious benefits of life in Northern Cyprus
- Key reasons for acquiring property in northern cyprus
- Foreign interest in Northern Cyprus real estate in numbers
- Investment-friendly locations
- Price dynamics
- Yield
- Case study
- Tips for choosing accommodation
The less obvious benefits of life in Northern Cyprus
- Superb ecology. Almost all beaches are awarded the “Blue Flag” status, confirming high-quality services and particularly the cleanliness of the water and the beach itself. Additionally, all beaches are public, so you can enjoy Northern Cyprus's nature without restrictions.
- “A Europeanized Turkey.” There are very few mosques, especially in Iskele, where they are almost non-existent. As a result, Northern Cyprus is often referred to as a little Europe with a Turkish flair.
- High level of safety. Cars and homes can be left unlocked, to the extent that spare keys are commonly left under doormats. Many relocate to the TRNC with their families to raise their children not only in an atmosphere of absolute safety, where a child can play outside until late at night without worry, but also to give them the European-style education.
- Education here follows the BES – British Education System, which is integrated into the international education system. Northern Cyprus diplomas are recognized worldwide, and if a child completes a local BES school, they can confidently apply to any university in Europe, Canada, or the USA, as the examination system is standardised. Education is conducted in English. With a residence permit, you can send your child to a free public school, but most prefer private ones.
Key reasons for acquiring property in northern cyprus
- To obtain temporary or permanent residence;
- Education for children;
- Buying resort properties to spend year-round holidays;
- Investment.
Foreign interest in Northern Cyprus real estate in numbers
In the first 10 months of 2023 alone, foreigners acquired 4,569 real estate properties in Northern Cyprus. From January 2019 to November 2023, the number of foreigners granted the right to purchase property in the TRNC reached 9,699, including land plots.
Over the past year, there has been a notable increase in interest from investors in Iran and Israel. While in the past, Turks made up nearly 90% of the buyers, this figure has now dropped to 70%. Buyers now come from as many as 70 different countries.
Investment-friendly locations
The primary customer flow is concentrated in the Famagusta/Iskele area. This area offers perhaps the best tourism and leisure opportunities. Forbes has already named the local Long Beach as the world's number one beach for investment, boasting a stunning sandy beach with a gentle slope, a longer swimming season, and only a quarter-hour's distance from Famagusta with its schools, clinics, and kindergartens. Residential real estate here is highly versatile, suitable for renting out, resale, summer vacations, or permanent living.
The second area of interest is Kyrenia (Girne), boasting its breathtaking landscapes and mountains that stretch right up to the sea. Additionally, it's a major business district.
Price dynamics
In the third quarter of 2023, the number of housing transactions in the Turkish Republic of Northern Cyprus increased by 6.28%. Residential real estate prices rose in all areas; in Famagusta by 10.43%, and for detached houses (villas and mansions) by 11.73%.
In Kyrenia (Girne), villa prices increased by 4.36%. In Nicosia, apartment prices rose by 3.05%.
The return on investment for housing is 17.3 years in Famagusta, 15.7 years in Girne, and 13.7 years in Nicosia.
Rental rates have increased by 5% in Nicosia, 5.3% in Girne, and 8.09% in Famagusta.
The cost of 1 m² of apartments now varies by area, ranging from £702 to £1771.
Yield
Property sellers in Northern Cyprus share the following statistics:
- Long-term rental yields are 8–10% per annum.
- Short-term rental yields are 10–14% per annum.
- Guaranteed income programs from developers are at 8% per annum.
- Reselling apartments purchased as investment properties at later construction stages can yield up to 40% per annum.
- Income from apartments in residential complexes managed by a company stands at 9–10% per annum.
Case study
Let's consider the yield using the example of investment apartments purchased in a prime location, with an optimal layout for profit generation:
- An apartment with a 60 m² living space and a 12 m² terrace.
- The cost is £165,000. The initial deposit is 30%, or £49,500.
- The instalment plan starts after a 3-month break (following the initial deposit) and can last up to 30 months, until the completion of construction.
- The monthly payment would be £3,850.
Resale
The selling price will be £215,000. As you can see, the difference is £50,000. Subtracting the reselling costs (transfer fee) of £2,000 and the agent's commission of £15,000, the net profit will be around £33,000.
Rental
For independent daily rentals in Northern Cyprus, the average rate is £70. The region is a nearly year-round tourist destination, so occupancy rates are about 80% throughout the year. The annual income will be £20,440, minus a 13% tax and approximately £700 for maintenance, resulting in £17,082. Long-term rentals bring in less money, but there's less hassle with tenants (cleaning, handovers) and occupancy rates are not 80% but 100%. Apartments in a stylish, club-like complex with private grounds and developed infrastructure will yield higher profits.
Tips for choosing accommodation
Naturally, when selecting property, it's essential to align your choice with your personal goals and preferences while considering the advice of consultants. However, in Northern Cyprus, there are two important aspects to remember.
- Pay particular attention to the richness of the infrastructure: the presence of a swimming pool, fitness centre, gym, saunas, steam rooms, cafes, etc. The more amenities available, the better. In some complexes in Northern Cyprus, access to tennis courts, and even cafes and restaurants may be included in the monthly maintenance fee, rather than being an extra cost as in property in Turkey. Regular sports enthusiasts can save a substantial amount of money this way.
- Heating. Northern Cyprus is a warm, sunny republic, and properties with heating are almost non-existent. However, some developers in their complexes install underfloor heating or lay pipes for the potential installation of radiators and heating systems. Of course, for an additional fee, underfloor heating can be installed in any property after purchase, but why pay extra? In addition, another heating option in Northern Cyprus is fireplaces; if someone finds this more practical or more romantic, keep it in mind.