The Cyprus housing crisis remains a major political and economic issue, with the government, property developers and professional bodies proposing different measures to increase housing supply, control costs and make better use of existing properties.
The government has introduced more than €100 million in housing measures, including an interest-rate subsidy for young couples taking mortgages of up to €400,000.
Finance Minister Makis Keravnos says housing policies need time to produce results but argues that a lasting solution depends primarily on increasing supply.
Although construction activity is strong because of high demand, the number of available homes remains insufficient.
Rent controls, Build-to-Rent and long-term rentals
The Cyprus Property Developers Association (CPDA) has cautioned against relying mainly on rent controls. Its president, Yiannis Misirlis, accepts that limiting sharp rent increases can protect tenants, but warns that strict or permanent controls could discourage investment in rental housing.
The CPDA argues that Cyprus needs to increase the supply of homes for long-term rent. One proposal is a Build-to-Rent framework to encourage institutional and private investors to develop rental properties. Bringing empty and underused homes back onto the market through renovation incentives could also increase supply.
Misirlis also supports faster planning and licensing procedures, alongside stronger dispute-resolution mechanisms, contractual security and guarantees for vulnerable tenants. The aim is to create a rental market that is both affordable for tenants and financially viable for landlords.
Renovate – Rent scheme faces calls for major reform
The Cyprus Scientific and Technical Chamber (ETEK) argues that the housing response should not rely solely on new construction because building new homes requires time, land, infrastructure, financing and administrative approvals.
Instead, ETEK wants Cyprus to make better use of its existing housing stock, particularly vacant or underused properties. It has called for a redesign of the Renovate – Rent scheme, which was intended to bring empty homes back into the long-term rental market.
Around 920 property owners registered when the scheme was announced in 2024, but only 84 applications were submitted, including rejected applications. Grants awarded amounted to approximately €1.2 million, compared with the original €25 million budget.
ETEK proposes requiring owners to prove that a property has been vacant for a specified period, renovate it and return it to the market. Properties could then be required to remain rented for at least three years. Landlords would retain greater freedom to choose tenants and set rents, while government oversight would focus on confirming vacancy, renovation and the establishment of a long-term tenancy. Grants can currently reach €40,000.
ETEK has also proposed wider reforms, including a digital identity for Cyprus’ building stock, targeted taxation of vacant properties and unused plots, and a single body responsible for housing policy.
Construction worker shortage adds to housing pressure
Meanwhile, the government is exploring ways to recruit construction workers from India and Egypt to address a growing labour shortage. The Cyprus Employers and Industrialists Federation (OEB) estimates that the construction sector needs around 5,000 additional workers, ranging from labourers and drivers to skilled technicians and engineers.
Employers say recruiting workers from outside the EU involves additional immigration procedures, while the departure of some Syrian workers under the government’s repatriation scheme has further increased pressure on the industry.
Overall, the Cyprus housing crisis is driven by insufficient supply, strong demand, financing costs, planning constraints, rental-market pressures and underused properties. Government measures, rental-market reforms, better use of vacant homes and efforts to address construction labour shortages will all be needed to improve housing availability and affordability.