Currency Matters – is now a good time to buy property in Cyprus?
We live in interesting times. Banks are having to be rescued before they go under – the the financial system as we know it down with them. Retail sales are plummeting – and this after the holiday season – traditionally by far the best time of the year in the retail calendar. It seems as if no one is quite sure if they will have a job in the future and there seems to be no end in sight to the current economic downturn. In the UK, the government continues to be in denial, blaming the UK’s current woes, and the weakness of sterling, on the Americans. The Americans continue to throw vast amounts of money at its problems and the Europeans have decided to adopt the US approach. But where does this leave the three currencies; the EURO, the GPB, and the USD?
If I was a betting man it would have to be on the €. This however would have to be a long term bet. The US$ has benefited the most in the short term, gaining ground against both the € and the £. The main loser has been sterling. The problem with the UK is that it has huge debts, no longer has the ability to produce goods and is over-reliant on the financial sector. The US has similar problems but benefits from the fact that it is viewed as a safe haven asset – who knows why, but it is. This leaves the €, which has its problems, but Euro land does have the advantage that it produces things, especially in Germany, and a lot of its residents have a saving rather than a spending mentality.
So how does all this impact on people interested in buying property in Cyprus?
I actually think it is an excellent time to be actively looking with the intention of buying property in Cyprus. Why do I think this?
- Sterling is unlikely to get better (strengthen) against the € in the short to medium term and there are greater chances of it actually getting worse (weakening). Therefore, to own a € asset would make a lot of sense in diversifying your risk. In other words, if you own something in Cyprus, valued in €’s, it is likely to have a greater value than it would in sterling terms.
- Property prices everywhere have fallen from unsustainable levels. Tough negotiation may well bring the price back to a more realistic level if you were to buy now and make what may well have been considered a ‘cheeky offer’ a few short months ago. This would offer real value for money, even factoring in having to buy €’s at sterling’s current exchange rate.
- Perhaps most importantly, it would allow you to "live your dream" and change your lifestyle. This factor is not to be underestimated, given the economic problems we are likely to encounter in the UK over the next few years.
Where Smart Currency Exchange is best able to benefit you is when you budget for your Cyprus property purchase. Thousands of our clients use our expertise to minimise the risk and remove the stress of wondering how much sterling they will need when they come to buy their €’s. It’s better to know what the overall cost is upfront, on the day you decide to buy, rather than paying much more on the day you actually transfer your currency for your property if the exchange has gone against you. and work with our clients to save them thousands of pounds.
We watch the market 12 hours a day, five days a week and work with our clients to save them thousands of pounds. Go to www.smartcurrencyexchange.com/mail.htm to learn more about the Smart service.