Ask Wire CEO Pavlos Loizou has warned that Cyprus’ housing problem is not being driven by a lack of land, but by the failure to use existing land effectively, arguing that idle urban plots are keeping supply tight and pushing prices higher.

According to Loizou, “Cyprus does not lack land”, but rather “lacks the effective use of land”, with data collected by Ask Wire making this clear.

In the Acropolis area of Nicosia, only 53 per cent of the permitted building coefficient is actually being used. Loizou explained that the building coefficient refers to “the ratio of allowed floor area to plot size”, while the remainder is “permitted, but not built”.

In practical terms, this translates into more than 1 million square metres of unused buildable floor area, enough to deliver approximately 10,000 additional apartments in a single central urban area.

A parallel analysis of the Papas area in Limassol, he added, points in the same direction, with more than 18,000 additional residential units able to be created across the two urban cores in Nicosia and Limassol if existing planning capacity were fully utilised.

Loizou described this as “not a marginal inefficiency”, but something that is “at the core of the housing problem”.

For him, the binding constraint is “on supply, not demand”, as Cyprus continues to attract both local buyers and foreign capital.

“What is missing is activation,” Loizou said, adding that “land is being held, not developed”.

The price record, he noted, is consistent with this reading.

Based on Ask Wire’s analysis of Land Registry transactions, the median price of urban residential land in Cyprus increased from €203 per buildable square metre in the first quarter of 2021 to €257 in the first quarter of 2026, marking an increase of approximately 27 per cent.

The rise was much sharper in Limassol, where prices increased from €245 to €356 per buildable square metre, or 45 per cent.

Loizou also pointed out that Larnaca rose by 34 per cent, Nicosia by 25 per cent, while Paphos and the government-controlled areas of Famagusta each recorded increases of around 13 per cent.

This matters, according to Loizou, because “the cost of new housing is not driven only by construction materials, labour, VAT or financing costs”.

Instead, he added, “a growing share of the pressure now comes from the land component itself”, particularly in areas where permitted capacity exists but is not being activated.

The two findings, Loizou explained, reinforce each other, as “where activation lags and effective supply is artificially constrained, prices respond”.

The steepest increases, he noted, are concentrated in urban areas where “the gap between permitted and built capacity is largest”, adding that this is “not a theoretical link”, but something “visible in the Land Registry data itself”.

At an individual level, holding land can be entirely rational, since “landowners benefit from price appreciation without taking development risk”.

“In a rising market, waiting is often more profitable than building,” Loizou said.

At a system level, however, he warned that the same behaviour creates a distortion, as “fewer units come to market”.

This means that “prices rise faster than incomes”, while “wealth concentrates in those who already own land” and “access to housing becomes more difficult, particularly for younger households and local buyers”.

The obvious policy response, in Loizou’s view, is “to activate supply”.

One mechanism in this direction, he suggested, is “the taxation of persistently idle or underutilised urban land”.

Such instruments are “not novel”, he noted, pointing to Ireland’s Vacant Site Levy on serviced urban land left undeveloped, the United Kingdom’s council-tax premiums of up to 300 per cent on long-term empty homes, and targeted land-value or vacancy taxation used in several European cities.

Although “the instruments differ in design”, Loizou said the underlying principle is well established: “that holding well-located urban land out of use carries a real public cost, and that ownership should reflect that cost”.

In Cyprus, however, the real obstacle to such solutions is “not economic”, but “political economy”.

Those who oppose such measures, Loizou explained, are typically those who own land, including companies or individuals who have held assets for years, sometimes decades.

They tend to be “more politically engaged”, “more consistent voters” and, in many cases, “closer to political influence”, whether directly or indirectly through funding.

At the same time, he pointed to a broader “trust deficit”, noting that citizens often resist new taxes not only because of the cost, but because of how public funds are used.

“When government spending is perceived as inefficient or wasteful, even well-targeted policies face resistance,” Loizou said.

This, he added, creates a deadlock.

“The economics are clear: activating idle land would increase supply and ease pressure on prices,” Loizou said.

“But the incentives are misaligned,” he added, explaining that “those who benefit from the current system have both the means and the motivation to maintain it”.

As a result, policy tends to avoid the issue and falls back on softer measures, such as subsidies, incentives or demand-side support, “which often end up pushing prices higher still”.

For Loizou, “the framing needs to change”.

“This is not about taxing property in general,” he said.

“It is about taxing inactivity in high-demand urban areas where unused land imposes a real cost on the wider economy,” he added.

Design also matters, with Loizou saying that the focus should not be on “small owners or primary residences”, but on “persistent underutilisation in strategic locations”, with clear thresholds, exemptions and a credible enforcement mechanism.

Cyprus, he said, stands at “a crossroads”, while politicians face “a fundamental dilemma” over whether to serve society as a whole or remain pleasing to a privileged few.

The country, Loizou added, can continue with a model where land is held as “a passive store of value”, reinforcing inequality and constraining supply. Alternatively, Cyprus can move towards a system where ownership of urban land carries “a degree of responsibility to the functioning of the market”.

“The data already tells us the answer,” Loizou concluded, adding that “the question is whether policy is willing to follow it.”