Cyprus is facing a critical situation when it comes to being able to access housing, with numerous indicators painting a grim picture that demands immediate attention, according to Marinos Kineyirou, president of the Cyprus Real Estate Agents Registration Council.
“The data lies before us, and it is unforgiving,” Kineyirou said, noting that “numbers tell the truth”.
“Something needs to be done soon, as the acquisition of housing, whether through an outright purchase or rental, is becoming increasingly challenging,” he added.
He noted that while this issue is not unique to Cyprus, as many developed countries grapple with similar problems, it remains a pressing concern.
Even in countries like the United States and the United Kingdom, he explained, homeownership for young people, specifically millennials, is becoming progressively harder.
Kineyirou explained that several factors contribute to this issue. These include the ongoing global economic developments, demographic changes, and the increase in life expectancy, which leads to a delay in releasing existing properties back to the market for sale or rent.
Moreover, the European Central Bank’s monetary policy decisions, aimed at curbing inflation, have pushed housing loan interest rates to 4.21 per cent in August 2023, compared to 2.82 per cent in August 2021.
“In simpler terms, monthly instalments have nearly doubled,” he said.
“It is not surprising that demand for housing loans is decreasing while lending criteria are becoming stricter,” he added.
At the same time, Kineyirou noted that increased demand from international arrivals due to the relocation of companies and personnel to Cyprus in recent years has maintained a positive market image but has also driven up property prices due to limited existing housing stock.
“Apartment purchase prices increased by approximately 12 per cent in just one year, and rental prices rose by about 20 per cent,” Kineyirou said.
“It is not coincidental that, after observing such a high demand, many property owners demand prices beyond the norm,” he added, noting that “even when real estate agents offer suggestions [in terms of realistic asking prices], they insist on the prices they are already thinking about, due to the high demand they observe in the market”.
What is more, Kineyirou noted that recent turmoil in Israel is also expected to bring more Israeli residents to Cyprus for security reasons, just as Ukrainians and Russians did after the war in Ukraine.
“It is possible that many will also relocate their businesses to Cyprus, as Lebanese entrepreneurs did a few years ago,” he said.
“However, to maintain this interest and keep these individuals in Cyprus, rather than them seeking housing in other countries, our property prices must be at reasonable levels and not become exploitative,” he added.
Moreover, Kineyirou stressed the importance of the government taking immediate action to address this issue by creating a comprehensive strategy. It should aim for both long-term results and immediate solutions.
“We are no longer merely talking about the right to property [in the legal sense], as defined in the Cypriot Constitution, but about being able to access housing and what it entails for a country’s residents,” he concluded.