Cyprus locals exposed to high housing prices, warns council president | Cyprus News

Cyprus is facing a critical situation in housing affordability and numerous indicators paint a bleak picture that requires immediate attention, said Marinos Kineiro, president of the CyprusReal Estate Agents Registry.

"The data lies before us and it is ruthless," Chineiro said, noting that "the numbers tell the truth."

"Something needs to be done soon because homeownership, whether buying or renting, is becoming increasingly difficult," he added.

Factors affecting the problem of housing affordability

Marinos Kineiro, president of the Real Estate Agents Registration Board, said that while the problem is not unique to Cyprus, as many developed countries face similar problems, it remains a pressing issue.

As Kineiro explained, several factors are contributing to this problem. Among them are current global economic developments, demographic changes and increasing life expectancy, which is delaying existing properties from coming on the market for sale or rent.

Moreover, the European Central Bank's monetary policy to curb inflation has led to an increase in mortgage interest rates to 4.21 percent in August 2023 from 2.82 percent in August 2021.

"Simply put, monthly payments have almost doubled," he said.

Increase in demand and growth of real estate prices

At the same time, Kineiro noted that the increased demand from international arrivals due to the relocation of companies and staff to Cyprus in recent years has maintained a positive view of the market, but has also led to an increase in property prices due to the limited availability of affordable housing.

"Apartment purchase prices have increased by about 12 percent in just one year, while rental prices have increased by about 20 percent," Chineiro said.

“It’s no coincidence that, observing such high demand, many property owners are asking for prices above the norm,” he added, noting that “even when real estate agents suggest realistic prices, they insist on prices they already have in mind due to the high demand they see in the market.”

Moreover, Kineyru noted that the recent upheavals in Israel are also expected to attract more Israeli citizens to Cyprus for security reasons, similar to what Ukrainians and Russians did after the war in Ukraine.

“Perhaps many will also move their business to Cyprus, as Lebanese entrepreneurs did a few years ago,” he said.

“However, in order to maintain this interest and keep these people in Cyprus, rather than allowing them to seek housing in other countries, our real estate prices must be reasonable and not become exploitative,” he added.

The need for immediate action

Moreover, Kineyru emphasized the importance of the government taking immediate action to address this issue by creating a comprehensive strategy. It should aim for long-term results as well as immediate solutions.

“We are no longer just talking about the right to property (in a legal sense), as defined in the Cypriot Constitution, but about the possibility of access to housing and what that means for the residents of the country,” he concluded.