At the end of 2024, Cyprus launched the state-run “Renovate and Rent” scheme. Its main goal is to return vacant, unused or poorly maintained apartments and houses to the affordable rental market. Initially, the authorities expected to bring around 1,000 residential properties back onto the market within two years, with a programme budget of €25 million. Property owners were offered financial assistance for renovation, on the condition that the homes would subsequently be rented out at affordable rates. However, the scheme proved to be far less popular than expected.
In particular, only 86 applications have been submitted since the scheme was launched, of which 54 were approved. Owners were given the opportunity to recover part of their renovation costs, including works carried out up to one year before the programme was announced. The scheme was extended twice. In 2026, the Cyprus Ministry of Interior announced that applications from property owners would be accepted from March 16, 2026 until December 31, 2027 through the electronic Affordable Housing platform.
Why owners are reluctant to participate
The reasons for the low level of participation are not limited to the amount of state support. One of the main issues is financial viability. An owner of an older apartment may find it more profitable to rent it to several foreign tenants at separate rates than to undertake the renovation themselves and then rent the property under restricted conditions.
For the owner of a single apartment, participation in the scheme means additional formalities, time spent preparing documents and a period during which the property generates no income because of renovation works. After that, the home must be rented under the terms of the scheme for 4 years, with the rent capped at the level set by the programme. Professional market participants also face challenges. An investor with funds available for renovation may find it more profitable to redevelop an old building and sell the apartments or construct new properties instead. In a high-demand market, this allows the investment to be recovered more quickly and the capital to be redirected into the next project.
Another issue is the complexity of the procedure itself. The original announcement and implementation guide ran to 34 pages and contained numerous requirements. Some of the conditions were later simplified, but for a private owner the scheme could still appear overly complicated. In the original version, the maximum grant amounted to €20,000 for a one-bedroom property, €30,000 for a two-bedroom property and €40,000 for a three-bedroom property. It is important to note that the conditions of the second phase for 2026–2027 were changed: initially, in 2024, the authorities had indicated grants of €15,000, €25,000 and €35,000 respectively.
How much vacant housing is there in Cyprus?
The idea behind the “Renovate and Rent” scheme emerged against the backdrop of a serious imbalance in Cyprus’s property market. It is estimated that around 30,000 residential properties could return to the market after renovation, thereby increasing the supply of affordable housing. The latest Population and Housing Census, conducted in 2021, counted 492,931 residential units in Cyprus. Of these, 354,818 were in normal use, while 138,113 were vacant or used only temporarily. Some of the latter are likely to be holiday homes and apartments.
Urban areas accounted for 298,020 properties, or 60.5% of the entire housing stock, while rural areas accounted for 194,911, or 39.5%. By district, the distribution was as follows:
- Nicosia — 163,350 properties (33.1%);
- Limassol — 132,574 (26.9%);
- Larnaca — 82,274 (16.7%);
- Paphos — 74,473 (15.1%);
- the government-controlled areas of Famagusta — 40,260 (8.2%).
Cyprus’s population reached 923,381 in 2021, compared with 840,407 in 2011. Over the decade, it increased by 82,974 people, or 9.9%. The number of residential properties rose by 59,719, or 13.8%, over the same period.
Why affordable housing remains in short supply in Cyprus
Population growth is not the only reason for rising rental demand. After 2021, legislative changes were introduced in Cyprus to make it easier for companies and third-country nationals, particularly skilled professionals, to relocate and work on the island. This also increased demand for rental housing. Additional competition for apartments and houses emerged in the market: in some cases, owners prefer to rent their properties to foreign tenants at higher prices, increasing pressure on local residents and students.
This is why the success of the “Renovate and Rent” scheme matters not only to owners of older properties. The more vacant apartments that can be brought back onto the market, the greater the supply of rental housing and the stronger the potential competition among landlords. The Cypriot authorities are now once again trying to attract property owners to the scheme. Its second phase runs until December 31, 2027 and provides financial support for the renovation of vacant properties, which must then be rented to people on low and middle incomes. At the same time, the state is developing other housing policy instruments. For example, the Cyprus Land Development Corporation (CLDC) is involved in creating affordable rental housing and managing properties made available through the “Renovate and Rent” scheme.