The increased demand for housing from high-income foreigners is exacerbating the housing crisis in Cyprus, making it more difficult for locals to buy or rent property. Speaking on the “Alpha Kalimera” program, Thomas Dimopoulos, Chair of the Department of Real Estate Development and Appraisal at Neapolis University Pafos, explained the factors that shape prices and the options available to citizens for securing housing.
As he noted, Cyprus is an attractive destination for foreign workers and investors due to its geographic location, tax incentives, and quality of life. “When many people want something, its price goes up,” he noted, explaining that foreigners with higher incomes are competing with Cypriots to buy or rent homes. As a result, in certain areas, rising sales prices and high rents are making it increasingly difficult for the local population to access housing.
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Regarding efforts to address the housing crisis, Mr. Dimopoulos made it clear that “there is certainly no magic wand,” emphasizing that long-term planning and coordinated interventions are required. He estimated that, if the right foundations are laid today, tangible results may become apparent even a decade from now. He also addressed the debate over restrictions on real estate purchases by foreigners, noting that even such a measure would not necessarily eliminate pressure on the market, as demand could shift toward renting. At the same time, he emphasized that housing programs and government interventions take time to yield results.
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Referring to the real estate market’s trajectory, he noted that there are tools available for monitoring prices, including the Neapolis University index, data from the Central Bank of Cyprus, and the RICS indices. He refrained, however, from making a specific forecast for prices in the coming years, as these are influenced by many factors. He likened the real estate market to a game in which appraisers record the outcome, while the actual decisions are made by real estate developers, property owners, and the government through tax and housing policies.
He made special mention of young people and families looking to buy their first home, emphasizing the need to adjust their expectations to their actual financial capabilities. “They need to take their salary into account. They should look for a property that fits their budget,” he said, explaining that the traditional aspiration of Cypriot families to own a single-family home on their own plot of land is becoming increasingly difficult to achieve. Consequently, he suggested considering smaller homes and apartments, with prospective buyers comparing the cost of rent to the monthly payment on a mortgage.
Finally, he pointed out that the choice between buying and renting cannot be based solely on a comparison of monthly payments, as interest rates—especially variable rates—can significantly alter the cost of a loan. He considers location, accessibility, and the quality of life a property offers to be equally important. “There’s no need to panic,” he emphasized, noting that market participants and the government are called upon to respond to the needs of citizens who are currently struggling to secure housing, by creating housing tailored to their financial means.
