According to a new European Commission report, “The Housing Market of the European Union: Trends, Drivers and Policies,” Cyprus ranks first in the EU for the length of construction procedures. On average, completing all construction stages on the island requires 507 days — almost twice as long as in Slovakia (300 days) and Romania (260 days).
For comparison, construction timelines in Northern Europe are the shortest: Denmark — 64 days, Finland — 65, Lithuania — 74, and Bulgaria — 97. In Greece, construction takes 180 days, and in Germany — 126. Experts note that such prolonged timelines in Cyprus reflect excessive bureaucracy and the lack of digital tools in the construction process, which slows down real estate development and increases the cost of housing.
Key Problems in the Construction Sector
The report highlights that complex urban planning and construction regulations in Cyprus create additional barriers for developers. These procedures often rely on decisions from local and regional authorities, making the permitting process more complicated and slower.
The problem is further exacerbated by the fact that Cyprus is one of the few EU countries without legally defined deadlines for issuing building permits. Other countries without such timelines include Denmark, Latvia, Luxembourg, Slovakia, and Sweden.
While in Lithuania a building permit can be issued in just three weeks, and in Portugal in 31 weeks, in Cyprus the procedure can stretch over many months due to the volume of required documents, numerous approvals, and the absence of digital document processing.
Transaction Costs and Land Management
The study also compares property transfer costs. The highest transaction costs were recorded in:
- Malta — 13.5%
- Belgium — 12.7%
- Luxembourg — 10.1%
In Cyprus, this figure stands at 7.7%, which is higher than in Greece (4.8%), but below the EU average.
The quality of land administration in Cyprus is rated relatively high — 23 out of 30 — significantly better than in Greece (4.5), Malta (12.5), and Romania (17). However, experts note that digitalizing land registries and speeding up cadastral procedures remain key priorities for the government.
Property Taxation and the Issue of Vacant Homes
Another section of the report focuses on taxation. The European Commission emphasizes that recurrent property taxes are an effective tool for regulating the market and reducing speculative demand. However, Cyprus, Estonia, Croatia, Hungary, Italy, and Malta do not apply systematic property taxation, which, according to experts, contributes to rising prices and a growing number of vacant homes.
The problem of empty housing is becoming increasingly visible: an estimated one in six homes in the EU is vacant, and in Cyprus this share is even higher — particularly in coastal areas, where properties are often purchased as investments but not permanently occupied.
Outlook: Construction Sector Reform and Digitalization
The Cyprus government has already announced plans to speed up reforms in the construction sector. In the coming years, authorities plan to introduce:
- online platforms for submitting permit applications
- a unified service center for developers
- simplified documentation requirements
These measures are expected to reduce application processing times by at least 30–40%, increase transparency, and stimulate investment in the construction sector — especially given the rising demand for housing from foreign buyers and IT professionals relocating to the island.