According to fresh statistics from the Central Bank, Cyprus has recorded a noticeable increase in the number of auction sales of real estate worth up to 350 thousand euros that were purchased for the first time for owner-occupation.
This concerns mid-price segment housing — specifically those houses and apartments where families live, for whom the loss of property becomes a serious social blow.
The data, which are submitted to the Parliament of Cyprus on a quarterly basis, reflect increasing pressure on borrowers with “red” mortgage loans. After the cancellation of the moratorium on the foreclosure of primary residences at the beginning of 2024, the situation has been gradually worsening.
Growth in sales after the end of the moratorium
In the third quarter of 2025, 98 primary residential properties were sold in Cyprus. Of these, 93 properties had a market value below 350 thousand euros. Only 5 houses belonged to the higher-priced segment. Compared with the same period in 2024, the number of such properties sold through auction more than doubled. At that time, sales were counted in single digits. Today, however, the trend is clearly upward, despite the relatively small overall volume of transactions.
Most properties worth up to 350 thousand euros are ultimately acquired by the mortgage lender after the first auction is declared unsuccessful. Some properties still pass to third parties. This means that more and more families are losing their primary homes.
More than 800 homes — at risk
According to the latest Central Bank report for July–September 2025, more than 800 primary residential properties were in the auction process. Most of them are properties valued at up to 350 thousand euros. Borrower representatives claim that the number of such cases continues to grow monthly.
In just one quarter, notifications at various stages of foreclosure were sent to hundreds of owners. For 174 properties valued at up to 350 thousand euros, the date of the first auction has already been set. This means that the procedure has effectively entered the final phase.
How the foreclosure procedure works
According to current transfer and mortgage legislation, the process begins with a notice of arrears exceeding 120 days. This is followed by a series of official letters that provide limited timeframes to settle the debt. From the first notification to the actual auction takes approximately 4–6 months. However, the process may be prolonged due to court objections or attempts to restructure the loan. Despite this, statistics show that more and more cases reach the sale stage.
Political disputes and the search for solutions
The topic of foreclosure of such properties has once again become one of the key issues on the public and political agenda. After the cancellation of the protective regime for housing valued up to 350 thousand euros, deputies and public organizations are increasingly speaking about the need for new protection mechanisms for the middle class.
At the end of 2023, legislation was adopted to create a special judicial jurisdiction for handling foreclosure cases, however this mechanism has still not become fully operational. The powers of the financial ombudsman have also been expanded, but its decisions are advisory in nature and not always binding for banks and asset management companies. Against the backdrop of approaching parliamentary elections in the country, discussions have intensified about a temporary suspension of auctions and about revising the rules for restructuring “red” loans. Dozens of legislative initiatives aimed at protecting borrowers are being prepared for discussion in Parliament.
Increasing pressure on the middle class
The increase in the number of auctions at which properties valued up to 350 thousand euros, purchased for the first time for owner-occupation, are sold indicates a systemic problem. High interest rates in recent years, rising living costs, and the consequences of economic crises have increased the burden on households.
If the trend continues, the Cyprus real estate market may face not only social consequences but also additional pressure on the banking system. Central Bank statistics already show that the foreclosure of primary housing has ceased to be an exception and is gradually becoming a noticeable phenomenon in the market.