In Cyprus, housing remains a pressing issue. While the government continues to roll out new incentive schemes and planning tweaks every few months, the core problem remains unchanged: there simply aren’t enough homes.
Despite the flurry of announcements, residents still struggle to find affordable housing, and experts warn that the situation is only getting worse.
Too many promises, not enough results
Property developers, students, and international investors are all chasing the same shrinking pool of housing stock. Meanwhile, government policies appear reactive and inconsistent. The frequent revisions to housing incentives are raising eyebrows, with many calling for a more stable, long-term strategy.
Poly Kourousides, President of the Cyprus Association of Property Valuers, recently spoke on SIGMA’s “Mesimeri kai Kati“, shedding light on the government’s latest efforts — and their shortcomings.
According to Kourousides, the amended Housing Incentive Scheme approved by the Cabinet is less a product of strategic foresight and more a reaction to earlier failures. “The essence of the policies is correct,” he said. “We need more supply to bring prices down. But the incentives offered so far just haven’t been attractive enough to developers.”
What’s new in the latest housing incentive scheme?
Here are the key changes:
- Wider application areas: The scheme now includes Commercial and Tourist Zones where residential development is permitted.
- Expanded eligibility: Certain areas within the Policy Statement that border Local Plans are now included.
- Higher building allowances: The allowable building coefficient rises to 35% (from 30%) where incentive combinations apply.
- Smaller minimum plot sizes: In zones with a building factor below 100%, the required land area drops from 3,000 sqm. to 2,000 sqm.
These may sound promising, but as Kourousides noted that, many of these adjustments reflect feedback that was given from day one – and largely ignored. “We warned early on that requiring such large plots wasn’t realistic, especially within city limits.”
Universities are coming – but where will students live?
Adding to the pressure: new universities are setting up in Cyprus, and they’re bringing thousands of students with them. This means skyrocketing demand for accommodation – but again, no solid plans to meet it.
“We’re just hoping the private sector decides to build student flats or dormitories,” said Kourousides. “But even if they do, that takes 2–3 years. We need action now.”
His association is recommending that universities house at least 10–15% of their student body in dedicated student residences — a move that could ease the burden on the private rental market.
Who’s getting priced out?
Cyprus’ property market is heating up again. Falling interest rates and the easing of conflict in Israel are drawing investors – especially Israelis – back to the island. Land Registry stats show a 15% jump in property activity in just the first three months of the year.
The downside? More demand means higher prices. And many Cypriots are being left behind.
“We estimate that around 30% of our fellow citizens won’t be able to buy or rent a home,” warned Kourousides. “That’s the unfortunate reality for the years ahead.”
Global challenges, local impact
And it’s not just internal issues causing concern. The global economy, trade tensions, and geopolitical events are having knock-on effects in Cyprus too.
“Nothing happens in isolation anymore,” said Kourousides. “We’re part of a global market. When Europe feels economic pressure, Cyprus does too.”
Final thoughts on housing
The housing situation in Cyprus isn’t just about bricks and mortar – it’s about long-term planning, social equity, and adapting to a rapidly changing economic landscape.
If the country wants to avoid a full-blown housing crisis, now is the time for consistent, coordinated action. Because right now, it seems like the only thing increasing faster than property prices… is confusion.
(Translated and summarised from the Greek article in Economy Today)
Residential property ie permanent homes are increasingly being lost to short term holiday rentals eg AirBnb. A relatively small complex like mine of 42 units that were all “lived in” only 5 years ago now has at least 11 holiday lettings with a 12th on the way having just been purchased by an Israeli family specifically to let to holidaymakers.
Plus they’re not all registered so the government does not have a clear picture of this rising issue.
There are a number of countries that limit Airbnb type rentals – Which cities and countries are cracking down on Airbnb-style rentals?
There has been talk of the Cyprus restricting short term holiday rentals – and no-one’s making sure they’re registered.