Cyprus is poised for a decline in both rental and property purchase prices over the coming years, President Nikos Christodoulides has announced, largely due to a significant increase in new housing developments, which are expected to bring balance to the property market.
Speaking at a dinner hosted by the Cyprus Property Developers Association in Limassol, attended by Interior Minister Constantinos Ioannou, the President emphasised the importance of real estate and construction as a “key pillar” of the Cypriot economy, accounting for 15% of GDP and employing more than 40,000 people.
Public-private cooperation key to housing reform
Christodoulides thanked the association for its constructive collaboration in shaping business development policies and bolstering economic resilience.
Highlighting a series of housing reforms, the President stated that government policy is focused on increasing housing supply, particularly affordable housing for young people, through targeted measures.
“The results so far demonstrate both the soundness of our policies and the value of public-private cooperation for the benefit of the entire population,” he said.
Strategic housing programmes in action
The national housing strategy, Stegazo to Mellon mou, is central to these efforts. It includes revised urban planning policies and the Build to Rent scheme, both of which incentivise developers by granting a 25% – 45% bonus in building coefficient, provided a portion of additional units are offered at affordable prices.
According to the Interior Ministry, interest in these programmes has been strong among both developers and the public. More than 1,900 new homes are expected to be delivered under the schemes, with a considerable share dedicated to affordable housing.
An additional €8 million raised through the sale of extra building rights will be allocated to the Cyprus Land Development Organisation (KOAG) to support further affordable housing initiatives.
Market already showing signs of cooling
President Christodoulides noted that signs of a market shift are already visible. A slowdown in housing price increases was observed in the third quarter of 2024, continuing into the fourth quarter, according to the latest House Price Index from the Central Bank of Cyprus.
“With the new housing stock entering the market, we anticipate a further balancing of supply and demand, which will ultimately lead to a reduction in rental and purchase prices,” he said.
Cyprus is also ranked 24th out of 27 EU member states in terms of rent and house price growth, indicating a relatively moderate trajectory in comparison to its European counterparts.
Faster permits and legal reforms on the way
To further streamline development, the government plans to cut the time for issuing urban planning and building permits to 40 working days for low-risk and 80 days for medium-risk projects.
In addition, a new bill focused on regulating jointly owned buildings is currently under legal review and will soon be submitted to Parliament. The aim is to enhance property management and resolve long-standing disputes among co-owners.
Broader economic reforms underway
Beyond housing, Christodoulides reiterated Cyprus’ goal of meeting all technical criteria for Schengen accession by the end of 2025.
He also announced the launch of the Business Support Centre; a cornerstone of wider reforms intended to improve public sector productivity and create a more attractive environment for investors.
“Our core objective is to boost the efficiency of public services, thereby supporting the business community and the wider Cypriot economy,” the President concluded.
