Cyprus urged not to follow Barcelona’s rental restrictions

The need for a rational regulatory framework for short-term rentals was the central focus of a recent meeting between the Cyprus Property Developers Association and Kyriacos Hadjiyiannis, chairperson of the house committee on energy, trade, industry and tourism.

According to a statement issued by the association, the meeting was attended by the association’s chairman Yiannis Misirlis, board member Nicolas Karoullas, and general director Mersina Isidorou.

During the meeting, Misirlis underscored the “significant contribution that short-term rentals make to the Cypriot economy and tourism sector“.

He referenced Barcelona as a frequently cited example in the ongoing debate around rental platforms, but argued that the comparison to Cyprus is misleading.

“Barcelona faces a serious problem of overtourism, whereas our country is actually striving to increase tourist arrivals and strengthen its competitiveness” he said.

He added that the restrictions imposed in Barcelona did not prohibit short-term rentals outright, but instead introduced regulatory oversight.

Speaking further about the economic benefits of short-term rentals, Misirlis warned that any prohibitions would have multiple adverse effects.

“A ban would damage the tourism sector and reduce the competitiveness of the Cypriot tourism product” he said.

He also stated that such a move would “deprive ordinary citizens of the opportunity to earn additional income at a time when rising prices are burdening households”.

Misirlis said that “related professions, such as electricians, plumbers and cleaning service providers, would also be affected, as would rural communities that depend on non-hotel accommodations to attract visitors”.

“Tourists who stay in such rentals often spend significant amounts at local businesses, including restaurants, cafes, shops, entertainment venues and tourism services, directly supporting the local economy” he said.

In light of these concerns, Misirlis emphasised the need for a “modern and rational regulatory framework that ensures fair competition and tax compliance“.

What is more, the Cyprus Property Developers Association assured Hadjiyiannis of its “readiness to contribute through its proposals and positions to the creation of a comprehensive and effective regulatory model that serves the interests of the Cypriot economy, citizens and property owners”.

Why are authorities cracking down on short-term rentals?

Cyprus has witnessed a rapid surge in short-term rental properties, with registrations increasing sixfold since mid-2022.

According to figures presented to Parliament in May 2025, around 12,000 to 13,000 units are currently active in the free areas of the Republic, but only 8,375 have secured official registration, a legal requirement since July 2021.

These registered units collectively offer 36,784 beds, up from just 1,545 two and a half years ago.

Paphos and Famagusta account for over two-thirds of all registered listings. In Paphos alone, 3,957 properties offer 17,802 beds, while Famagusta contributes 1,702 units with 8,728 beds.

In May of this year, the Deputy Ministry of Tourism said that it was still processing more than 1,500 applications, including 952 awaiting documentation or fee settlement.

Authorities have intensified efforts to enforce compliance. Since the inspection campaign began, 52 complaints have been filed against unlicensed operators.

The Deputy Ministry issues regular reminders to hosts, alerting them to upcoming registration expiries and encouraging timely renewals.

A new bill is under review in Parliament to align with an EU regulation taking effect in May 2026, which will mandate platforms like Airbnb and Booking.com to share data with national authorities.

Meanwhile, the growth of Airbnb-type rentals has drawn mixed reactions.

While the Paphos regional tourism board sees economic benefits, including increased spending in local businesses and new income streams for residents, concerns have been raised about unequal regulation.

“Hotels are subject to strict health, fire safety, and accessibility rules, which do not always apply to short-term rentals,” said Etap Paphos regional manager Nasos Hadjigeorgiou.

He also warned of distorted price competition and potential pressure on hotel profitability.

Nationally, the average listing is rented for 230 nights a year, generating roughly €20,000 per host.

Moreover, experts estimate over 14,000 short-term rentals are on the market, with around 11,000 having applied for registration.

Although Cyprus has not yet seen the backlash experienced in cities like Athens and Barcelona, where residents protest rising rents, concerns over housing availability, particularly in Limassol, are mounting.

The Deputy Ministry has reiterated that operating without a permit constitutes a criminal offence, punishable by up to €5,000 in fines or one year in prison.