Despite bank shut downs, empty ATMs and crashing property values, not all the ex-pats in Cyprus are losing sleep over the financial crisis. In fact, the 10,000 British property owners and residents in the Turkish-controlled Republic of Northern Cyprus (TRNC) – as well as British staff in the local banks and property development companies – have cautiously celebrated a “swing to the North” as the first evidence begins to emerge of a new confidence and investment in the north of the island in contrast to the stricken Republic.
Previously viewed as somewhat of a murky investment zone, the TRNC now boasts rising property values in key investment areas – as well as new tax free zones and high bank interest rates of up to 9.5% for investors. In addition, brand new roads, marinas, hospitals and educational institutions create a higher standard of living for ex-pat residents. All of this is very attractive to serious investors and property seekers who are seeking an alternative to the European South.
“Of course we would like to see the whole of Cyprus in a positive financial situation,” says Angela Henderson, Property Marketing Manager for Aphrodite Beachfront Village, a fast-selling luxury beachfront vacation and property investment site on the West Coast, where apartment owners are enjoying 10% p.a. capital growth. “But there is no doubt that an unexpected side effect of this unfortunate crisis has been to create new interest in the North. Now our challenge is to ensure that the British public recognise that the banking and property system in Turkish North Cyprus has no link to the South.” Despite this challenge, her property enquiries from the UK for this pre-74 secure Turkish Title resort have already risen this week by 300%.
British ex pat Banker James Swanson, Product Development and Marketing Manager at the local Near East Bank is also witnessing a massive opportunity for business expansion in an area where banks are outside the jurisdiction of the EU. “We experienced a 24% growth last year as the fastest growing bank in the TRNC. With the problems in the South of the island, we can already see that rate increasing. There is currently £2 billion of British ex pat investments in South Cyprus banks and we would expect the levels in North Cyprus banks to rise significantly. We are putting in place new incentives for British investors to invest with us, as informed investors recognise that our banking system is totally separate from the troubled European South”.
Northern officials have taken to the airwaves to forecast that a wave of expatriate deposits from Greek Cypriot banks could move across the island’s dividing line to escape taxation and insecurity. The Turkish Cypriot banking regulator put the region’s lenders on notice Tuesday to prepare for large deposits and to be mindful of transfers that could contravene anti-money-laundering rules.
”We are expecting the Greeks’ economic problems to bring more deposits here. It’s natural because our banks are stronger and offer higher interest,” Ersan Tatar, the region’s finance minister, said in an interview.
“British and Russian depositors will need to find another home for their money,” he added. “When the banks open, we’re only a few meters away.”