With Cypriot authorities clamping down on loud music and typical 18-30s antics, Ayia Napa is fast becoming an upmarket holiday destination and a serious hotspot for property investors, says Assetz.
Nightclubs and bars playing loud music very late at night are now closed down immediately and their music equipment is confiscated, in a drive to rid the resort of its downmarket reputation.
Families with children and more upmarket holidaymakers are quickly moving in to take the place of the 18-30s tourists, and suitable property and facilities are springing up to cater for them.
Three golf courses are planned for construction and two huge marinas are also scheduled to be built to take large yachts, which will help transform Ayia Napa into the Monte Carlo of the Middle East.
The area is very green and rich in history with a national park, sixteenth century Venetian monasteries and a crescent harbour lined with fishing boats.
Ayia Napa is to the east of the island and is also two to three degrees warmer than the west with a much more reliable climate and less rain, resulting in longer rental seasons and higher yields.
Moira Augusti, a local resident who has lived near Ayia Napa for almost a decade, says: “Several years ago, Ayia Napa was a club haven for the young, it was extremely noisy and there was always trouble.
There is now a dramatic change. The streets are occupied by families with children eating ice creams and young couples walking hand-in-hand, rather than young drunken clubbers.
The noise levels were much quieter due to restrictions set by the local Mayor and there was no trouble at all.
It reminded me of how Cyprus was when I first moved here.”
House prices in Cyprus have risen by around 15% over the last 12 months, but Ayia Napa along with nearby Protaras and Paralimni saw rises of an additional 5%, making them prime locations for investors.
Although capital growth in Cyprus is expected to slow by the end of 2006 to 10%, these hotspots are still expected to retain their 5% lead, resulting in a strong 15% growth for investors.
This is partly a result of the fact that house prices in Ayia Napa are currently considerably lower than the rest of the island, giving greater scope for growth as the area regenerates.
A penthouse apartment of 80 – 90 sq m. with a 50 sq m. terrace in the area, 300 yards from the beach with on-site swimming pools, tennis and shops, would cost about 110,000 sterling.
Such a property would cost around 30 – 40% higher at the other end of the island, in the region of 145,000 – 155,000.
Stuart Law, managing director of Assetz, says: As the higher quality holiday companies move into Ayia Napa and the world-class golf courses and marinas open for business, the potential rental income for investors is significantly improved.
They will also benefit from house price growth which is likely to be higher than the rest of the island as the upmarket tourist trade continues to develop.
When Cyprus adopts the Euro in 2008 it will have to decrease interest rates from the current 5.5% to the currently much lower Euro rate, making borrowing cheaper, which is likely to further strengthen the property market.