A growing trend worldwide is that the richest 1% (or 0.1%) of the population owns more capital than the rest of the population combined. According to a new study by BestBrokers based on data from the World Inequality Database, Cyprus has experienced the fastest growth in wealth concentration among the super-rich over the past twenty years.
How the structure of wealth in Cyprus has changed
From 2000 to 2023, the share of national wealth concentrated in the hands of the wealthiest 1% of Cypriot residents increased from 12.8% to 33.3%. On average, each member of this elite group now accounts for nearly one-third of the country's total financial resources.
The growth among the wealthiest 10% of Cypriots is also significant; their share of total national wealth increased from 50.7% in 2000 to 66.7% in 2023. This growth rate places Cyprus among the leaders in Europe.
The role of "golden passports" and real estate
Experts attribute this dynamic to global economic processes and the "golden passport" program, which was in effect from 2007 to 2020. This program attracted wealthy investors, mainly from the Middle East, Russia, and Asia, leading to a sharp rise in luxury real estate prices. According to analysts, the cost of housing in coastal cities in Cyprus rose by more than 80% during this period, and demand for premium properties significantly outstripped supply.
Global Context
The greatest increase in wealth concentration among the richest people has been recorded in China, rising from 48.3% in 2000 to 68% in 2023. Meanwhile, South Africa currently has the highest level of wealth inequality; the richest 10% of the population controls approximately 85.8% of the national capital.
Even Slovenia, considered one of the most equal societies at the beginning of the 21st century, faced a significant increase in the wealth gap by 2023, with the richest 1% owning 23.1% of the wealth.
Why is this important for Cyprus?
A sharp rise in wealth inequality could affect the labor market, housing affordability, and social stability. Economists warn that, if the trend continues, the elite will further distance themselves from the rest of the population and real estate prices will continue to rise, making housing unaffordable for locals. Authorities are considering measures to stabilize the market and introduce stricter regulation of investment programs to reduce pressure on the economy and society.