Cyprus

Cyprus is facing a significant housing crisis marked by rapidly rising property prices, increasing rents, and insufficient affordable housing, particularly in urban areas. In the first quarter of 2025, house prices grew by 4.8% year-on-year, with detached houses seeing annual increases of 5.6% and apartments 3.5%. Demand is fueled by both domestic buyers and a surge in foreign purchasers, especially in cities like Limassol and Larnaca, leading to sharp competition for available units. Median rents have also increased, and the overall cost of securing housing—whether buying or renting—has risen due to higher construction costs and stricter lending conditions. These factors make it more difficult for many Cypriots to access adequate housing. Eurostat data shows that 11.2% of people in Cyprus have experienced housing difficulties, with the problem more acute among those at risk of poverty, where the figure rises to 14.7%. Vulnerable groups such as low-income families, the middle class, young people, newly arrived immigrants, and those displaced by historical events are disproportionately affected. The supply of social or public housing remains minimal, leaving long waiting lists and few alternatives for those unable to compete in the private market. The housing crisis is thus impacting not just the most disadvantaged, but increasingly the broader population as well.

The Cypriot government is actively addressing affordable and sustainable housing through a series of targeted policy measures and recently communicated sector goals. Its main current approach centers on expanding supply and easing access for middle- and low-income groups, with a particular focus on young people and families. Notable targets include constructing nearly 1,900 new residential units under the "Build to Rent" scheme, of which over 280 are earmarked as affordable, and building 200 additional affordable homes in 2025, alongside a 138-unit project in Limassol. Key government programs include: - The Urban Planning Incentives Scheme, which allows developers additional building density (up to 45% more units) in exchange for making at least 20% of the extra homes available at prices set by the Cyprus Land Development Corporation (KOAG), thus boosting the affordable housing stock while channelling developer fees into a dedicated Affordable Housing Fund. - The "Build to Rent" initiative, requiring that all homes built under this scheme be rented at rates below market value. - Financial support schemes, especially for young buyers and families, offering grants for first-time home ownership. - The “Renovate & Rent” program, incentivizing landlords to renovate and offer vacant properties for rent via tax breaks. - Accelerated planning and permit reforms, shortening approval times to increase housing supply quickly. - Extension of grant schemes to rural and disadvantaged areas, with substantial funding already allocated. Although construction rates and policy focus have increased, the government acknowledges that supply remains short of demand, particularly in urban centers.

Housing cooperatives in Cyprus have a marginal role in the national housing system. The sector is not well developed and comprises a negligible share of total housing units, with estimates placing cooperative or social housing below 2% of the housing stock. Most Cypriot residents own their homes, and the market is dominated by private homeownership rather than collective or cooperative models. Unlike countries with a stronger cooperative housing presence, there is no sizable or traditional cooperative housing movement in Cyprus. Recent policy discussions mention the potential for social enterprises, including cooperatives, to play a greater role in affordable housing. Regulations now exist for the oversight of social housing providers, including cooperatives, but these frameworks are new and practical impact remains extremely limited. Any existing cooperative housing in Cyprus is tightly regulated, with oversight by government agencies. Profits must be reinvested, and management boards may include community and public sector representatives to promote accountability. Government support for cooperative or social housing focuses on affordable housing for low-income or vulnerable groups, primarily through other mechanisms. Programs include subsidized loans, affordable rental and homeownership schemes, and land grants for eligible entities but do not single out cooperatives for special promotion. Overall, despite recognition of cooperatives as part of the affordable housing solution in European policy discussions, their actual footprint in Cyprus remains extremely small and shows only limited development momentum.

Cyprus’s housing market in 2025 is experiencing strong growth, with property prices rising 4.8% year-on-year in the first quarter and record-high transaction volumes. Limassol leads in price growth, while demand is fueled by both domestic buyers and foreign investors. Home ownership remains dominant, with estimates indicating more than 70% of Cypriots own their homes, while the rental sector is relatively small but growing, roughly accounting for 20–25% of the population. Median rents for apartments average around 10–14 euros per square meter monthly, depending on the city—higher in Limassol and Nicosia. Purchase prices for apartments now range between 2,200–3,200 euros per square meter, again with significant local variation. Publicly owned housing plays a limited but important role. The Cyprus Land Development Corporation (CLDC) implements government social housing, targeting low-income families primarily through affordable rental and subsidized homeownership schemes. Public and social housing are used interchangeably in Cyprus; both refer to dwellings provided or subsidized by the government for people unable to access adequate housing in the private market. Socially minded housing focuses on affordability and accessibility, but the overall share of public/social housing in Cyprus’s total housing stock remains below 2%. Despite active government initiatives, there is a persistent shortage of affordable and social housing units, and waiting lists remain long, especially in urban centers.