Cyprus Faces Housing Crisis as Real Estate Prices Soar
Cyprus is currently grappling with a severe housing crisis that primarily affects younger generations, according to President Nikos Christodoulides. The increasing cost of construction and challenges in securing financing have led many residents to be priced out of the housing market. Although the government has promised to introduce a comprehensive affordable housing strategy in the near future, critics argue that more needs to be done.
The Green Party leader and Member of Parliament, Charalambos Theopemptou, emphasizes that the existing housing supply is insufficient to meet the growing demand caused by population growth and migration to the island. Theopemptou estimates that an additional 2,000 to 3,000 new homes will need to be built each year over the next decade to address the situation adequately.
One contributing factor to the shortage of available housing units is the significant influx of employees from offshore and high-tech companies relocating to Cyprus. Ukrainian refugees who sought shelter in Cyprus after Russia’s invasion have also added to the demand for housing. A government-sponsored scheme providing accommodation for Ukrainian refugees is set to end soon, resulting in an additional 3,000 individuals seeking rental properties.
Real estate agents confirm that the lack of available housing has led to a sharp increase in both rental prices and property values. The CEO of Ask WiRE, Pavlos Loizou, notes that the real estate sector experienced a slowdown following the 2008 international financial crisis, with limited construction activity until 2016. In recent years, developers focused on projects targeting foreign investors seeking Cypriot citizenship, but the industry was further impacted by the COVID-19 pandemic.
Loizou emphasizes the need for increased housing supply, including affordable housing units, to address the rising demand. He suggests that government intervention alone would not be sufficient, as the demand surpasses the capacity to cater to it. Drastic measures, such as taxing unused land, are proposed to incentivize landowners to either develop their properties or sell them to interested parties.
To tackle these challenges, President Christodoulides has pledged to implement an affordable housing strategy. The government plans to establish a Unified Housing Agency responsible for formulating the state’s housing policy and meeting the citizens’ needs.
As the housing crisis continues to affect Cyprus, there is a pressing need for comprehensive measures and collaboration between public and private sectors to address the growing demand and provide affordable housing options for the population.
Article Credits go to: Kyriakos Kiliaris (Cyprus Property News)
