North Cyprus, a beautiful Mediterranean island with a rich history and stunning landscapes, has become a popular destination for property investment. One striking feature of the North Cyprus property market is the use of the British Pound (GBP) as the primary currency for buying, selling, and renting properties, even though the official currency is the Turkish Lira. This unique phenomenon has had a profound impact on the market's stability and the value of properties. In this blog, we'll explore the benefits behind this practice and why GBP is the currency of choice for property transactions in North Cyprus.
1. Stability Amidst Currency Fluctuations:
One of the most significant advantages of using GBP in North Cyprus property transactions is the stability it offers. The Turkish Lira is known for its volatility, with fluctuations driven by various economic and political factors. In contrast, the GBP is renowned for its relative stability, making it a preferred choice for investors looking to safeguard their investments.
2. International Appeal:
The use of GBP makes North Cyprus properties more attractive to international investors, especially those from the United Kingdom and other countries where GBP is commonly used. It simplifies the purchasing process for foreign buyers, reducing currency exchange complexities and potential losses due to unfavorable exchange rates.
3. Value Preservation:
Property values in North Cyprus have a history of maintaining or increasing their worth when priced in GBP. This is partly due to the stability of GBP and the growing demand for North Cyprus properties among international investors. As a result, many investors view North Cyprus real estate as a safe haven for their money, as it tends to hold its value and even appreciate over time.
4. Ease of Transaction:
Using GBP streamlines the property transaction process. Buyers and sellers do not need to constantly monitor exchange rates or worry about fluctuating values. This simplicity fosters confidence in the market and encourages more transactions, benefiting both local and international investors.
5. Strong Rental Income:
Many property owners in North Cyprus who rent out their properties to tourists or long-term tenants prefer to set their rental prices in GBP. This decision provides a consistent and predictable income stream, shielded from the fluctuations that might occur if rents were denominated in Turkish Lira.
6. Brexit and the North Cyprus Connection:
The UK's decision to leave the European Union (Brexit) also contributed to the use of GBP in North Cyprus property transactions. Some investors who sought alternative investments after Brexit found North Cyprus appealing, given its historical ties to the UK and the ease of conducting transactions in GBP.
In conclusion, the North Cyprus property market's adoption of the British Pound (GBP) as the de facto currency for buying, selling, and renting properties has proven to be a smart and resilient choice. It has brought stability, international appeal, and value preservation to the market, making it a sought-after destination for property investors worldwide. While there are certainly risks associated with any investment, using GBP in North Cyprus provides a level of security and predictability that many investors find attractive, making it a compelling choice for those looking to invest in a property market with strong growth potential.