Cyprus’s housing market is changing rapidly, and this is already being reflected in government support programs. According to Interior Minister Konstantinos Ioannou, the island has seen a steady decline in the number of applications for rental housing benefits over the past three years. The main reason is a sharp rise in rental prices, which has made monthly mortgage payments almost comparable to market rents.
Demand for subsidies is falling, interest in buying is rising
Official data show that the number of people receiving state assistance to cover rent is decreasing year by year. More and more Cypriot families and young professionals are choosing not to renew rental contracts and instead are looking for opportunities to purchase their own homes. Bank lending programs, combined with government schemes for buying and building housing, are encouraging this shift—especially as renting in cities and coastal areas becomes increasingly expensive.
In response to rising rents, the government has already increased the subsidy amount by around 15%. However, even this has not been enough to reverse the overall trend: many people see a mortgage as a more advantageous long-term strategy than ongoing rental expenses.
How the rules are changing and why a reform is being prepared
The rental subsidy program is administered by the Service for the Care and Rehabilitation of Displaced Persons, which has managed it for more than 15 years. Authorities acknowledge that the current system needs updating. A draft bill has now been submitted to the legal service, aiming to amend outdated legislative provisions and introduce new criteria for assessing applications.
Once approved, the government plans to implement modern income-calculation mechanisms and updated eligibility scales to broaden the pool of potential beneficiaries and ensure a fairer distribution of funds. This is particularly important against the backdrop of continued growth in property prices and rents across the country.
Where unused funds go and what this means for the market
The rental subsidy program’s budget is utilized at more than 90% each year. Any savings do not remain unused; instead, they are redirected to other housing schemes related to the purchase, construction, and renovation of homes for displaced persons. This allows more applications to be financed than originally planned and further stimulates the real estate market.
What lies ahead for the housing market
Amid limited supply, strong interest from foreign buyers, and the growth of tourist rentals, Cyprus’s real estate market continues to face pressure. In 2025, experts expect rental prices to remain high, particularly in Limassol, Nicosia, and Paphos. This suggests that the shift from renting to buying is likely to continue.
For many families, homeownership is becoming not only a way to shield themselves from rising rents but also a form of long-term financial stability. For the state, the current reforms could prove to be a key step toward creating a more flexible and fair housing support system that reflects the new realities of Cyprus’s property market.