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Could Middle East tensions boost Cyprus property market?

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Escalating tensions in the Middle East, particularly the conflict involving the United States, Israel and Iran, have inevitably raised questions about potential ripple effects across the Eastern Mediterranean.

For Cyprus, a country whose property market has historically been sensitive to geopolitical shifts in the region, the key question is whether the current crisis could once again reshape demand and pricing dynamics.

Real estate professionals say the market is watching developments carefully, but without signs of panic.

Andreas Christoforides, Chief Executive of the Landbank Group, says property transactions in Cyprus are continuing largely uninterrupted despite the heightened geopolitical climate.

“The market is following recent events calmly,” he notes. “At present we do not see any impact that would justify concern or alarm. In fact, much of what is reported abroad about Cyprus often bears little resemblance to the reality on the ground.”

According to Christoforides, while there has been a modest dip in property purchases in recent days, such hesitation is typical during periods of uncertainty and is likely to prove temporary.

“Similar patterns emerged in 2022 following Russia’s invasion of Ukraine and during previous tensions in Lebanon,” he adds. “Experience shows that Cyprus,  and particularly its real estate sector, tends to demonstrate remarkable resilience.”

Indeed, past crises have sometimes strengthened the island’s appeal. Last year, heightened instability in neighbouring countries led to increased interest from investors in Lebanon and Israel seeking a stable European base.

Demand currently remains strongest for residential properties, particularly apartments and family homes, both for owner occupation and rental investment. Limited housing supply combined with sustained international demand is helping maintain price levels.

“I would not say prices are being squeezed,” Christoforides says. “If anything, they are being reinforced as Cyprus continues to mature as a quality investment destination.”

A property market with a ‘memory’

Pavlos Loizou, Chief Executive of property data firm Ask Wire, argues that the Cypriot real estate market has developed a clear “memory” of how it responds to geopolitical shocks.

Following the Beirut port explosion in 2020, interest from Lebanese buyers surged, particularly for homes in Larnaca and Limassol. Two years later, the war in Ukraine triggered a relocation wave of businesses and residents to Cyprus, again pushing demand higher, especially in Limassol.

Foreign buyers now represent a major pillar of the market. Roughly four out of every ten property purchases in Cyprus involve overseas buyers, while in districts such as Paphos and Larnaca the share frequently exceeds 50%.

Currently, Loizou notes, the strongest interest is coming from Israeli buyers, with smaller but notable demand from Lebanese nationals.

“These purchases are not necessarily luxury investments,” he explains. “In many cases they involve ready-to-move-in two- or three-bedroom apartments or family homes near international schools, infrastructure and good flight connections.”

For many buyers, Cyprus effectively serves as a “Plan B residence”, a secure second base within the European Union but still close to their home countries.

In the short term, geopolitical uncertainty often leads to a temporary pause as investors adopt a wait-and-see approach. However, if instability persists, historical patterns suggest the opposite effect may emerge: increased demand from individuals and companies seeking stability in safer jurisdictions.

Cyprus as a regional ‘Plan B’

Leonidas Hadjinicolaou, Director of Research and Negotiations at Danos Cyprus, says recent developments have already begun to influence buyer behaviour.

“In times of uncertainty, investors and families look for safe and stable destinations within the European Union to diversify investments and protect their assets,” he explains. “For many in the region, Cyprus effectively becomes a Plan B while remaining close to home.”

According to market estimates cited by Danos, interest from Israeli, Lebanese and Iranian buyers has surged since the latest escalation, with some property platforms reporting demand increases of up to 300% compared with previous periods.

However, there are potential downside risks. Cyprus’ investment property sector is closely tied to tourism, with around 16,000 short-term rental properties currently operating across the island.

Should prolonged geopolitical tensions disrupt tourist flows, occupancy levels – and therefore investment yields – could come under pressure.

More broadly, the duration of the conflict may prove decisive. Rising construction material costs, possible tourism volatility and shifting international demand could all influence the trajectory of Cyprus’ property market in the months ahead.

For now, though, the island appears to remain what it has often been during times of regional uncertainty: a safe harbour for investors seeking stability.

(Translated and summarised from an article in philenews)

 

Consumer groups criticise delays in Cyprus banking cases

Sharp criticism has been directed at Cyprus’ Legal Service over what consumer advocates describe as unjustified delays in pursuing court cases against banks over unfair mortgage clauses.

According to an article published by the Cyprus Consumers’ Association’s legal officer Virginia Christou, several cases dating back as far as 2015 remain unresolved despite findings by the Consumer Protection Service that potentially abusive terms were used in mortgage contracts.

The Cyprus Consumer Protection Service had already completed applications for injunctions against banking institutions in 2015. However, many of these cases have yet to be heard in court, raising concerns about enforcement of legislation designed to protect borrowers.

Christou questioned how newer cases progressed through the courts more quickly while older ones, involving confirmed violations affecting thousands of consumers and mortgage borrowers, remain stalled for years.

Long list of pending consumer cases

Among the unresolved cases are those involving Alpha Bank Cyprus, Bank of Cyprus, Hellenic Bank, the former Cooperative Cyprus Bank, and National Bank of Greece (Cyprus).

Several of the decisions identifying problematic clauses were issued between 2015 and 2018, before being forwarded to the Legal Service for further action. Yet despite the time elapsed, many remain pending without judicial review.

By contrast, two more recent cases moved through the courts at a far faster pace.

One involved Societe Generale Bank – Cyprus Ltd, where the Consumer Protection Service issued a decision in 2017. In February 2021, a court ordered the immediate cessation of 13 clauses in mortgage loan agreements deemed abusive.

Another ruling came in May 2025 against the Housing Finance Corporation, with the Nicosia District Court issuing injunctions preventing the continued use of unfair clauses in loan contracts. The decision was widely described by stakeholders as a landmark judgment for consumer protection.

Banks face significant fines

Meanwhile, regulators have recently stepped up enforcement action.

Last week, the Consumer Protection Service imposed a €160,000 administrative fine on Alpha Bank Cyprus for the use of unfair terms in mortgage agreements signed between 2017 and 2025. The clauses affected nearly 5,000 contracts, many involving borrowers aged between 20 and 45.

The bank indicated it would amend the clauses in future contracts and notify existing borrowers while waiving rights linked to the disputed provisions.

The penalty follows two major fines issued in September 2025: €800,000 against Bank of Cyprus and €600,000 against Hellenic Bank (now part of Eurobank). Together, the rulings concerned more than 22,000 mortgage agreements.

Further investigations on behalf of consumers

Cyprus’ Consumer Protection Service has confirmed that investigations into mortgage contract terms across other banks are ongoing. Officials say a new wave of inspections will begin in 2026 as part of broader efforts to strengthen oversight of lending practices.

At the same time, proposed legislative amendments aimed at reinforcing consumer protection against unfair contractual clauses are expected to be debated in parliament before its dissolution in April.

How foreign interference in Iran reshaped relations with the West

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Iran-backed Hezbollah launched a drone strike on RAF Akrotiri just after midnight on 2 March. Damage was minimal and no one was injured. I live nearby and heard nothing at the time, though I did hear aircraft about 25 minutes later.

I only learned of the attack the next morning. Curious about its roots, I looked into Iran’s history and found, with some help from a friend, that much of today’s turmoil traces back to decades of foreign interference…

The coup that rewrote Iran’s destiny

In the early 1950s, Iran stood at a crossroads – one that might have led to a durable parliamentary democracy. Instead, it became the stage for one of the most consequential covert operations of the Cold War, a plot that toppled an elected leader and helped shape the turbulent Middle East we know today.

By 1953, Iran operated largely as a parliamentary constitutional monarchy. Power was not absolute in the hands of the Shah; it was contested and negotiated in the Majlis, the national parliament, which possessed the authority to appoint prime ministers and wielded genuine legislative influence.

Into this political arena stepped Mohammad Mosaddegh.

Mosaddegh and Iran’s fight to nationalise oil

A patrician reformer and member of the Moderate Socialists’ Party, Mosaddegh rose to the premiership in 1951 after winning a decisive vote in the Majlis and had the support of the Shah.

Iran Prime Minister pictured in 1951
Iranian Prime Minister Mohammad Mosaddegh pictured with US President Truman in 1951.

But the democratic vote in the Majlis election was flawed. The voting process was stopped by Mosaddegh after enough MPs were elected to form a parliamentary quorum (79 out of 136). The decision is viewed as manipulation, because Mosaddegh meant to prevent opposition candidates taking seats in the rural areas. Consequently, the highly organized Tudeh Party (a major Marxist-Leninist communist party) failed to win a single seat, despite receiving the second-highest number of votes.

Mosaddegh’s political mission was simple but explosive: Iran’s vast oil reserves, he argued, should enrich the Iranian people rather than flow into the coffers of the British-owned Anglo-Iranian Oil Company (AIOC), later known as BP.

Nationalisation followed, which resulted in the formation of the National Iranian Oil Company (NIOC.) Tudeh Party members supported the move.

The 1953 coup in Iran: CIA and MI6’s covert operation

For Winston Churchill, the UK Prime Minister at the time, the move was intolerable. Britain had long treated Iranian oil as a strategic asset underpinning its post-war economy. Churchill was determined not to lose it. When diplomatic pressure and economic sanctions failed to reverse Mosaddegh’s decision, Britain turned to covert means.

MI6 began plotting his removal and enlisted the help of the United States and, in 1953, the CIA joined and quickly lead the operation. What followed was a carefully orchestrated campaign of political sabotage: propaganda, the bribery of officials, and the mobilisation of paid protesters designed to destabilise Mosaddegh’s government.

Their efforts culminated in a coup that forced prime minister Mosaddegh from power in August 1953.

1953 coup in Iran
1953 coup in Iran

(Decades later, the United States would publicly acknowledge its role. In 2013, during the presidency of Barack Obama, American officials formally confirmed that the CIA ran the operation as part of US foreign policy, which included funding demonstrators and bribing key figures to bring down Iran’s elected government.)

Th political sabotage and riots by paid protesters against Mossadegh cemented the beginning of unrestrained US domination and the fading of British influence in Iran.

The Shah’s return and the rise of authoritarian rule in Iran

The coup restored monarchical power to Shah Mohammad Reza Pahlavi, who imprisoned Mosaddegh for three years followed by life-long house arrest, and led to a 50-50 oil revenue split with Western firms.

Shah Mohammad Reza Pahlavi
Shah Mohammad Reza Pahlavi

What followed was not a revival of constitutional balance but the consolidation of authoritarian rule. The Shah’s regime relied on sweeping surveillance, censorship and political repression. Dissidents – whether communist, socialist, nationalist or religious – were targeted by the feared secret police, SAVAK. Arrests, torture and imprisonment became tools of governance.

For many Iranians, the promise of parliamentary democracy had been replaced by a pro-Western autocracy sustained by foreign backing.

Ayatollah Khomeini and the end of Iran’s monarchy

By the late 1970s, resentment had reached boiling point. Years of repression, vast inequalities in society and political exclusion fuelled mass protests that ultimately coalesced around a powerful religious figure in exile: Ayatollah Ruhollah Khomeini.

In 1979, the Shah fled Iran.

The Iranian Revolution swept away the monarchy and replaced it with a radically different order. Khomeini returned to Tehran to tumultuous welcoming crowds. A fledgling multi-party parliamentary democracy had been expected, but by late 1980 Khomeini’s Islamic Revolutionary Party had systematically banished, closed down or eliminated all political opposition.

Ayatollah Ruhollah Khomeini
Photo credit: Tasnim News Agency – Ayatollah Khomeini with Hassan Khomeini

A referendum sealed the establishment of the Islamic Republic, transforming Iran from a Western-aligned monarchy into the Islamic theocracy that endures today.

Most recently Iran’s security forces acted to suppress widespread public dissent across the country. They massacred many thousands of protesters. Estimates of the death toll ranged from 7,007 to upwards of 36,500.

Iran–West relations after the 1953 coup

More than seven decades after the coup against Mosaddegh, historians and analysts still debate its legacy. Yet one fact remains difficult to escape: the decision by Western powers to remove a quasi-elected Iranian leader profoundly altered the country’s political trajectory.

Relations between Iran and the West have been shaped by a cycle of confrontation, intervention and retaliation. Tensions have played out through sanctions, covert operations and military pressure from the West, while Iran has answered with regional proxy networks, missile strikes and attacks on Western interests.

In June 2025, the US and Israel attacked Iranian nuclear and military sites, later claiming that the Iranians had been trying to rebuild its nuclear programme and develop missiles capable of delivering nuclear weapons.

Although negotiations between US and Iran appeared to be making progress, on 27 February 2026 Trump said he was “not happy” with the way the talks were going.

US President Donald Trump speaking to journalists on Air Force One

Hours later, the US and Israel began launched a massive pre-emptive military attack on Iran, with missiles, drones, and airstrikes targeting Iranian missile bases, air defences, military facilities, and its senior leadership.

Iran has responded with missile and drone strikes against U.S. bases and regional targets, escalating the conflict into a wider regional confrontation involving states that host US military bases as well as shipping through the vital Strait of Hormuz trade route.

What began as a struggle over oil ended by reshaping a nation and continues to cast a long shadow over relations between Iran and the West and will probably do so for many years to come.

 

Cyprus building permits surge as residential demand accelerates

Construction activity in Cyprus recorded a sharp increase during the first eleven months of 2025, with both the total area and value of building permits rising significantly, according to new figures from the Cyprus Statistical Service.

Between January and November 2025, the total floor area of projects granted building permits reached 2,945,408 square metres, marking a 35.3% increase compared with 2,176,919 square metres during the same period in 2024.

The total value of licensed projects also climbed strongly, reaching €3.59 billion, a 31.8% rise year-on-year, highlighting the renewed momentum in the island’s development sector.

Residential projects drive building permits growth

The increase in construction activity was accompanied by a rise in the number of building permits issued, which reached 7,340 between January and November 2025, up 13.9% from 6,442 permits during the same period a year earlier.

The growth was largely fuelled by residential developments. Permits for residential buildings totalled 5,472, representing a 23.9% increase compared with 2024.

By contrast, permits for non-residential buildings fell sharply to 768, a 24.3% decline year-on-year.

Other construction categories showed mixed trends. Permits for civil engineering projects rose to 445, an increase of 20.3%, while plot subdivision permits reached 543, up 14.8%.

However, permits for road construction projects declined to 112, representing a 33.3% fall compared with the previous year.

Apartment developments lead housing expansion

The surge in construction permits is expected to translate into a significant increase in housing supply.

The total number of residential units planned reached 14,401, a 36.1% rise compared with 10,584 units in the same period of 2024.

Apartment developments accounted for the largest share of growth. Planned flats in residential buildings rose to 9,586 units, reflecting a 44.1% increase.

Meanwhile, detached houses climbed to 3,507 units, up 35.2%, while semi-detached homes reached 1,069 units, marking a 42.0% increase year-on-year.

Snapshot of November activity

On a monthly basis, 850 building permits were issued in November 2025, with a total value of €382.9 million and a combined floor area of 333,400 square metres.

These permits provide for the construction of 1,631 residential units, underlining the continued strength of housing development across the island.

Planning reform and digital transition

The Statistical Service also noted that from 1 July 2024, responsibility for issuing building permits was transferred from municipalities and district administrations to the newly established District Local Government Organizations (DLGOS).

At the same time, the licensing process moved to the integrated digital platform “Ippodamos“.

Officials noted that the early months of the reform brought technical and procedural challenges, which affected the timely production of some statistical data during the transition period.

However, as we reported yesterday, the Property Developers Association has warned that authorising building permits is taking longer than the time needed to construct a project.

Permits taking longer than construction, Cyprus developers warn

Development licensing delays remain a major obstacle to tackling Cyprus’ housing problem, the Property Developers Association said after a meeting with Limassol district governor Yiannis Tsouloftas, arguing that faster permit approvals are essential to boost supply.

The association said the matter was discussed at a meeting this week, attended by president Yiannis Misirlis, members of its board, and general manager Mersina Isidorou.

During the discussion, it raised what it described as persistent delays in the licensing process, saying that, despite efforts to accelerate procedures, the problem continues. In some cases, it added, the time required to obtain permits exceeds the time needed to construct a project.

Misirlis said delays are “one of the main factors that exacerbate the housing problem”, as they reduce the market’s ability to respond quickly to rising housing demand.

He added that “the acceleration of licensing is key to strengthening housing supply, supporting development activity and ensuring the smooth operation of the real estate market”.

Misirlis also pointed to the importance of dialogue and cooperation between the District Local Government Organizations (DLGOs) and sector professionals to address existing challenges and advance practical solutions for the sustainable development of all cities.

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EU closes infringement case on Cyprus golden passport scheme

The European Commission has officially informed the Republic of Cyprus that it has terminated the infringement proceedings relating to the country’s former citizenship-by-investment scheme, known as the Cyprus golden passport scheme.

The announcement follows the government’s irrevocable termination of the scheme in 2020, alongside a series of actions by both the executive branch and the Legal Service to ensure compliance with European Union law. The Commission had previously determined that granting Cypriot citizenship through the scheme violated EU regulations.

According to the Legal Service, the matter was handled with urgency from the outset. Following EU guidance for a “judicial-type” review of all golden passport related issues, the General Attorney appointed the Nikolatos Investigation Committee in September 2020. Its findings, together with those of the Kalogirou Committee, prompted the Council of Ministers to revoke certain citizenships.

Further measures were taken to keep the European Commission informed. Meetings were held in October 2021 and May 2023 with then EU Commissioner for Justice, Didier Reynders, in Brussels and Cyprus, reviewing the steps taken by the Republic. A subsequent update occurred in June 2025 with the new Commissioner, Michael McGrath.

While Cyprus promptly terminated the disgraced golden passport scheme, the European Commission requested additional legislative amendments. In response, the Legal Service, in coordination with the Ministry of Interior, prepared a mutually agreed draft bill. The legislation, developed in cooperation with the Commission, was approved by the Council of Ministers and passed by the House of Representatives within three months of submission.

The Legal Service concluded by expressing strong satisfaction with the Commission’s decision to close the infringement proceedings, describing it as a highly positive development for Cyprus. This resolution marks a significant milestone in the country’s efforts to align its investment and citizenship framework with EU standards.

Commenting on the Commission’s decision, President Nikos Christodoulides said:

“Yes, I am pleased because the decisions that have been taken — decisions which are being implemented and which led to this decision [by the Commission], which I believe sends clear messages both regarding our intentions and the recognition of the work done, the decisions taken and our political will on this particular issue, on the part of the European Commission.”

But the consequences of the scheme linger on with the Legal Service filing an appeal against the acquittal of former House President Dimitris Syllouris and ex-MP Christakis Giovani by the Criminal Court of Nicosia in the golden passport case.