Better vision needed for investment

The national health system, introduced approximately four years ago, is costing the Republic of Cyprus and its people several billion a year.  The compensation paid to doctors and other participants has increased demand for medical services, with the average income from this service alone for ordinary GP doctors being approximately €200,000-€250,000 a year.

As the expenses for doctors are few, newcomers and the older generation of doctors are encouraged to join. Health professionals are coming from all over the EU, particularly Greece, while more adventurous companies in the medical field, such as Israeli companies, have shown an increasing interest in buying out existing private hospitals or building their own.

The income being created is now evident in the investment in real estate. The prevailing deposit rates (very low to negative) direct the newly acquired wealth to be invested mainly in local properties.

Apparently sales of apartments at the Protaras marina development – one to two bedrooms for around €700,000 – have been mainly to doctors, accountants and advocates.

There has also been a surge of new interest from medical laboratories, which have appeared on most main streets taking over expensive showrooms.

Now there is a lot of discussion going on regarding introducing mental health to the national health scheme, adding to the pool of new investors.

However, there is a mentality in this country of on the one hand encouraging investment, but on the other and cancelling or delaying infrastructural projects. The upgrading of the tourist industry must be encouraged as well.

The new objectionable proposal for permanent residency visas, the pending VAT increase from 5 to 19 per cent and more are also steps in the wrong direction if Cyprus wants to encourage investment.

It seems that there is not a comprehensive plan with a clear cut aim.

The influx of foreign investment has, of course, its negative side effects. Since most large-scale investments are happening in Limassol, there has been a huge rise in rents and property prices, which harms locals who can no longer afford housing. They often move out of the town towards the periphery, creating other problems regarding schooling, traffic and so on.

In this country we need our heads examined; perhaps the mental health  services can help with this. Small politics seem to be the main cause, as political parties seem to care little about the Cyprus economy as a whole.

We live in hope, but as circumstances evolve, we are running out of it.

Antonis Loizou & Associates EPE – Real Estate Appraisers & Development Project Managers, www.aloizou.com.cy, antonis.loizou@aloizou.com.cy