Chinese investors are on a buying spree, and Cyprus property is on their shopping list, says a leading Cypriot developer.
Their interest is driven by a number of factors, including the steep price of property in China’s major cities, such as Beijing and Shanghai, says the a real estate group which serves Chinese clients in Limassol.
Although this has earned investors enormous profits, the subsequent slowdown has prompted now prompted them to explore overseas markets.
In addition, the recent turmoil in the Chinese market, combined with economic recession, has further stimulated Chinese buyers’ interest in alternative investment opportunities abroad.
Many in Cyprus are concerned that the devaluation of the Chinese currency may inhibit Chinese demand, but Yiannis Misirlis, director of the group disagrees.
“Many of our clients are selling their assets in Beijing and Shanghai and making huge profits, which they partially reinvest in overseas property markets such as Cyprus.
“Their primary goal is to shift their investments out of China, because the Chinese currency is extremely unstable and out of control, and there are rumours of a bubble in both the stock market and the property market.”
Like many other Chinese investors, the group’s clients are buying residential properties for their personal use.
Some are looking to emigrate though the Cyprus Government’s Permanent-Residency-by-Investment scheme, which grants permanent residency status to anyone who invests at least €300,000 in a private home.
Many clients buy a home for their children who might consider attending university in Cyprus. “The Chinese regard education and private property as top priorities,” says Mr Misirlis. “There still is a strong desire to own property outside China, and I don’t believe this will change anytime soon.”
Although the recession in China is taking its toll on cash transactions, capital from China continues to flow into the Cyprus market, especially in light of the continued turbulence in the global market.
This global instability is Cyprus’s ‘best friend’, in terms of the inflow of foreign capital. Chinese investors are resorting to Cyprus as a safe haven. By avoiding the accumulation of capital in China, they are minimizing their risks.
Mr Misirlis adds, “Ultimately the flow of capital from China to Cyprus is being driven primarily by this desire for diversification of investments in overseas markets, in combination with the continued oversupply of domestic savings in China. The only scenario that will deter such investments is a decision on the part of the Chinese government to impose serious capital controls in order to secure the value of its currency.”
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