China boosts Cyprus housing sector

Looking East: Tourists walking past a real estate promotion billboard in Chinese on the seafront promenade in Paphos recently, as the Cypriot property sector turns to Chinese investors seeking easier access to Europe.

Πηγή: The Manila Times
March 10 2103

PAPHOS, Cyprus: The real estate sector on the recession-hit Mediterranean holiday island of Cyprus, a European Union (EU) member, is turning to Chinese investors seeking easier access to Europe.

Hundreds of Chinese have purchased second homes on the island thanks to a Cypriot law revised last year granting permanent resident status to foreign buyers of homes costing at least 300,000 euros ($390,000).

“The Chinese are not interested in houses as such in Cyprus. They are interested only in the permanent residency. They buy houses through visa firms,” said leading real estate agent Antonis Loizou.

While Cyprus has been an EU member since 2004, it does not belong to the Schengen passport-free zone, meaning permanent residency does not guarantee free travel across the bloc.

But “it is much easier to get a European visa” with Cyprus residency, stressed Wuang Hong, herself a long-time resident and telecoms employee who said that she assists Chinese investors.

She said that most Chinese investors are businessmen who buy on the coast, especially in and around the western resort of Paphos.

“Some want to give a better future to their children—give them an opportunity to live in a cleaner environment and go to good international private schools, which are much more expensive in China,” she said.

But only few Chinese have so far opted to settle in Cyprus, where residency does not grant a work permit, and none of them were willing to speak to Agence-France Presse.

Skirting the law

The investors, who are banking on a medium-term rise in house prices, have had to come up with methods to skirt Chinese law which in theory limits foreign currency exports to an annual $50,000 per person.

Apart from opening up Europe as a destination, Cyprus can provide a political refuge, access to the Cypriot banking sector and a way to circumvent China’s one-child policy.

But the players in Cyprus, where billboards have sprung up in Mandarin advertising luxury homes, insist money-laundering is not a factor.

“All this money has to come through a bank. No one can come with a suitcase full of cash and buy a house. It is all checked out,” said Nick Antoniades, who runs a service company for Chinese investors.

He said that the buyer must show documentation to prove annual income of at least 30,000 euros.