By Christos A. Kara, Attorney at Law, President of the Famagusta Bar Association
The discussion regarding the purchase of real estate in Cyprus by third-country nationals is not only legitimate but also necessary.
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
Cyprus is a small country with limited available land, growing housing needs, and a real estate market that has attracted significant interest from abroad in recent years. During the first seven months of 2026, foreign buyers accounted for 41.3% of real estate sales contracts in Cyprus, up from 39.2% during the same period in 2025. In practice, more than two out of every five real estate transactions now involve foreign buyers.
This is a figure we cannot ignore. However, it is not a figure that should lead us to draw hasty conclusions. The real question is not whether there should be oversight. There must be—and it must be substantive. The question is whether we need better oversight or simply more restrictions.
A Framework in Need of Modernization Cyprus does not currently operate without restrictions. Already, third-country nationals wishing to acquire real estate require the appropriate permit. The existing framework imposes specific restrictions on the size and number of properties that can be acquired. However, the mere existence of legislation does not mean that it is still functioning effectively.
Economic and corporate structures have changed dramatically. The real estate market has become globalized. The use of companies and other legal entities makes it much more complex to determine who the actual buyer is. That is why modernizing the regulatory framework is necessary. The state must know not only which company appears on the contract, but who the actual beneficial owner behind it is. It must also be able to effectively monitor cases of large-scale land consolidation and protect agricultural and forested land, as well as areas of particular national or strategic importance. There can be no compromises here.
Foreign investment, however, is not the enemy. There is another side to the debate.
For decades, we have been striving to establish Cyprus as a major regional business and investment hub. We have invested in our geographic location, our status as a member state of the European Union, our legal system, our professional services, and our human capital. And we have achieved a great deal. We cannot now view foreign investment as a threat across the board. Because foreign investment in real estate does not just mean the purchase of luxury apartments. It can mean a new hotel. A business center. The offices of an international company. A major tourism development. University facilities. A technology park. A productive investment worth millions that creates jobs and tax revenue. And this, in my view, is precisely where the weakness of horizontal restrictions lies. Not all real estate markets are the same.
Residential property is one thing, and productive investment is another. A third-country national who buys a number of apartments in an area where there is already intense housing pressure cannot be treated the same way as an investor who acquires real estateproperty to build a hotel or other commercial infrastructure cannot be treated the same way. Buying an apartment is not the same as acquiring hundreds of stremmata of agricultural land. Nor is the purchase of a property in a large, organized development the same as acquiring land in an area of particular strategic importance. Modern legislation must be able to make these distinctions. And we don’t need to reinvent the wheel.
What are other small European countries doing? Malta is perhaps the most interesting example for Cyprus. It is also a small island nation in the European Union, with limited land and an economy that seeks to attract foreign investment. There, the acquisition of real estate by certain categories of non-residents is subject to a license, and as a general rule, the purchase of one property is permitted. However, Malta took an additional step.
It created Special Designated Areas—specific developments where the usual restrictions on the number of properties do not apply in the same way. Simply put, the government says: where I need to protect, I regulate; where I want to systematically attract investment, I create the appropriate framework. It’s a philosophy that is at least worth studying.
Estonia takes a different approach. Specific restrictions on third-country nationals focus particularly on agricultural and forested land, where specific conditions and a licensing process are in place.
Different countries, different needs, different models. The conclusion, however, is the same: strict regulation does not necessarily mean a blanket ban. It means that the state knows what it wants to protect and where it wants to allow development.
But what about Cypriots who can’t afford to buy a home? There is, however, one argument we cannot afford to overlook. When more than 40% of real estate contracts involve foreign buyers and, at the same time, a young person or a young couple is finding it increasingly difficult to purchase their first home, the government must take this seriously. The answer cannot simply be that “the market works.” For many young Cypriots, it does not work. However, it would be equally wrong to give the impression that foreigners are solely to blame for the housing problem. Increased foreign demand certainly affects the market, particularly in certain areas. But it is not the only cause. The housing crisis is linked to an insufficient supply of housing, construction and financing costs, permitting procedures, land availability, and the long-standing absence of a comprehensive housing policy.
And here we must be clear: if we want more affordable housing, we must create more affordable housing. Through faster permitting processes. Through urban planning incentives accompanied by genuine social benefits. By utilizing state-owned land. By offering incentives for the construction of housing aimed at the middle class and young couples. Restrictions on demand can be part of a policy. They cannot be the entire policy.
So, rather than choosing between the two extremes of an almost unregulated market or an economy that fears foreign capital, we can create a modern Cypriot model. This would involve strict verification of the beneficial owner of every company intending to acquire real estate. By imposing restrictions on the concentration of multiple residential units, particularly in areas with severe housing pressure. Through special protection of agricultural and forested land and increased oversight in areas of national or strategic importance. But at the same time, by treating genuine productive and commercial investments differently.
It would also be worth considering—adapted, of course, to the Cypriot context—a model of designated investment or development zones following the example of Malta, where the rules would be clear from the outset and foreign investment could be directed toward areas where the Republic itself deems it serves its economic strategy.
Because what matters most to a serious investor is not the absence of rules. It is knowing what the rules are and that they will remain predictable tomorrow. This is called legal certainty.
The discussion, therefore, should not be framed in terms of “Cypriots versus foreigners.” Nor should it be “development versus society.” Cyprus must achieve three goals simultaneously: to protect the land and the strategic interests of the Republic, to protect young people’s ability to own a home, and to remain an open, robust, and competitive European economy that attracts real investment. These are not conflicting goals. However, they require targeted legislation, effective oversight, and, above all, a strategy.
So, yes, let’s close the loopholes that allow the law to be circumvented. Yes to real oversight of who buys Cypriot land. Yes to protecting housing and the country’s strategic interests. But let’s not also shut the door on those who genuinely want to invest, create, and produce in Cyprus. Because, in the end, the real question isn’t just who is buying land in Cyprus. It’s what kind of Cyprus we want to build on this land.
