The housing market in Cyprus has been facing a significant shortage in recent years, which has seriously affected the cost of renting and purchasing real estate, particularly in major cities like Limassol and Nicosia. This situation stems from several factors that have intensified the housing sector’s challenges.
Causes of the Shortage
- Growing Demand:
The influx of foreign professionals, especially in the IT sector, has significantly increased housing demand. Foreign companies’ active expansion has driven up the need for rental and purchased properties. - Rise of Short-Term Rentals:
The popularity of platforms like Airbnb has reduced the availability of properties for long-term rental, making it particularly difficult for local residents and students to find housing. - Slower Construction Rates:
Economic instability caused by the COVID-19 pandemic has led to a slowdown in new housing construction, further limiting supply in the market.
Impact of the Shortage on the Market
- Price Increases:
Housing rental prices have been rising sharply. In the second quarter of 2023, apartment rental costs increased by 17.9%, while house rents grew by 13.6%. - Challenges for Locals:
Young couples and middle-income families are finding it increasingly difficult to secure affordable housing. This issue has been officially recognized as a national crisis, as highlighted by government statements.
Government Measures
In response to the housing crisis, the Cypriot government has introduced several initiatives:
- “Renovate and Rent” Program:
Since November 2024, subsidies have been offered for restoring abandoned housing on the condition that it is rented out at affordable prices for at least four years. - Incentives for Developers:
The government is providing benefits to developers to accelerate housing construction. The plan includes building 800 rental properties within the next three years. - Regulating Short-Term Rentals:
Legislative measures are being considered to regulate short-term rentals, freeing up more properties for long-term tenants.
Expert Opinions
Despite the measures taken, experts point out that these are only temporary solutions. They emphasize the need for social housing projects and the introduction of taxes on vacant properties as more comprehensive approaches to addressing the issue.
Conclusion The housing shortage in Cyprus remains a critical issue, impacting both the real estate market and the daily lives of citizens. Resolving this challenge will require coordinated efforts among the government, the construction industry, and the local community. Addressing the housing crisis will be a crucial step toward ensuring affordable housing for all segments of the population.
