Young people face a housing dream out of reach – Calls for decisive state action from Petrou and Fakontis – How foreign investment, digital nomads, and short-term lets are worsening the housing crisis.
The Cypriot property market is undergoing a fundamental transformation, driven by a surge in foreign buyers, the widespread adoption of short-term rental platforms like Airbnb, and the influx of digital nomads. These factors are contributing to rising property prices and pushing affordable housing further out of reach, especially for young couples and employees on modest incomes.
Speaking on the “Mesimeri kai Kati” programme on SIGMA, former Defence Minister and property consultant Charalambos Petrides with AKEL MP Valentinos Fakontis, spoke of the mounting pressures in the housing market and warned that the current trend could lead to irreversible consequences if the government does not act swiftly and meaningfully.
More than 35% of wage earners make under €1,500
Charalambos Petrides highlighted the growing issue of housing affordability, citing the continued rise in prices as documented in the latest Central Bank report. “We need government intervention,” he stressed, noting that over 35 – 40% of employees earn less than €1,500 a month, making homeownership an unattainable goal for many.
While acknowledging that some state interventions exist, he argued they are insufficient. “Whatever is being done is not yet enough—or at least it hasn’t proven sufficient in light of what’s happening around us,” he said. “There are no magic solutions, but we must plan holistically, together,” he added, urging collaboration between the public and private sectors to implement a comprehensive housing strategy.
Major social issues are looming
From his side, Valentinos Fakontis underlined that housing is among the most critical issues currently facing Cypriot society. “In the past, every young couple could aspire to own a home, and everyone had access to affordable housing. That’s no longer the case – and this creates enormous social challenges,” he said.
Young people end up living with their parents
Fakontis pointed to the lack of a coherent housing policy, stagnant wages, and the rising cost of living as major reasons why “Cypriots today can’t even put a roof over their heads.”
“How can a young person buy a home when the cost of construction now reaches €2,000 per square metre for a conventional build? When residential plots cost €200,000 – €250,000 – where are we going? This is the big question the government needs to answer,” he said.
He also drew attention to soaring rental prices: “When a two-bedroom apartment in rural areas costs €1,000, and in urban centres €1,500 – €1,600, how can a couple survive?”
“We’re in a very difficult period, especially for young people just entering the job market who want to move out and start families. Things are extremely tough, and the state must step in with accessible, meaningful measures. Otherwise, the problem will escalate. People won’t be able to own homes, society won’t progress, and everyone will end up living with their parents, which is deeply disheartening.”
Housing map being redrawn
A key focus was the growing external pressures driving up property prices. Petrides noted that “around 50% of total property transactions involve foreign buyers, and in coastal areas that number climbs to 70–75%.” He added that the expansion of Airbnb-style short-term rentals worsens the situation by removing properties from the local rental pool and driving up rents.
Fakontis echoed these concerns, pointing out that many property owners are now turning to Airbnb for higher returns, to the detriment of local housing availability. He also mentioned the rising number of digital nomads and remote workers from high-income countries settling in Cyprus, which adds even more pressure to the market.
Proposals for supporting the housing market
Among the proposals discussed were the use of unused state land, a revision of outdated planning zones that haven’t changed since 2011, and tax incentives to encourage long-term rentals.
Petrides referenced a policy currently in place in Greece, where landlords who sign leases longer than one year benefit from reduced tax rates. He suggested that a similar scheme could be introduced in Cyprus, “to bring properties back to the rental market for periods of one to three years.”
(Translated & summarised from a Greek article by Xenios Mesaritis in Economy Today)
