Cyprus is facing a growing housing crisis, significantly affecting rental affordability for local residents. Demand for housing consistently exceeds supply, and competition among tenants has reached record levels. Increasingly, people struggle to find suitable apartments, especially in cities with active economic growth and an influx of foreign professionals.
According to a recent study by Perprice Consulting, from August to October 2025, rental rates for standard apartments increased in nearly all major Cypriot cities. Paphos saw the most significant growth at 4.8%, while Nicosia and Larnaca experienced moderate increases. The only exception was Limassol, where rents fell slightly by 1.9%.
Government Measures and Reform Plans
The Cypriot government has officially acknowledged the growing tension in the housing market. At a land development conference in March 2025, Interior Minister Constantinos Ioannou noted that rising construction material costs, driven by geopolitical instability and inflation, have severely limited the ability to build new housing.
Additionally, higher interest rates and increased demand from foreign workers have worsened the shortage, making rentals less affordable for locals. In response, authorities plan several initiatives:
- In tourist areas, removing quotas on multi-unit housing and reducing minimum apartment sizes by 15% to increase the number of available units.
- Introducing a new housing plan focused on mixed-use developments in commercial zones to help balance the market and meet worker demand.
However, experts warn that the impact of these reforms will be gradual, with real price reductions not expected before 2026.
Rents Under Pressure: Rising Competition and Selective Landlords
With limited supply, many tenants face strict selection criteria. Landlords are becoming more demanding, carefully screening applicants, raising rents, and sometimes conducting personal interviews.
- Some landlords require proof of employment and income, while others consider family status or pet ownership.
- Lambros Loizou, a landlord, prefers renting to working singles rather than families, citing lower risks for his property. He previously prohibited pets but now allows small dogs, joking: “Better a small dog than a noisy child.”
- Dora, another landlord living near her rental property, prioritizes tenants who are easy to communicate with, usually families with children. She also notes that male international students raise concerns about potential property damage, whereas female students are seen as more reliable tenants.
These examples show that the rental market is becoming increasingly personalized and competitive, with every available unit attracting intense demand.
A New Reality in the Housing Market
Despite rising pressure, Cyprus’s rental market has not yet reached the bureaucratic levels seen in countries like the UK or the Netherlands, where tenants are often asked for detailed references and certifications. Nevertheless, stricter conditions are already emerging.
The main issue is not only landlord requirements but also the combination of high housing costs and limited supply. Consequently, available options are shrinking, and even standard apartments in good neighborhoods have become highly contested.
According to analysts, without significant government intervention, the housing crisis in Cyprus could persist at least until the end of 2026. Foreign investment, growth in the services and IT sectors, and a steady inflow of expatriates continue to support demand, but they also prevent the market from cooling down.