Economists and real estate experts have attributed Cyprus’ soaring rental prices to a combination of strong foreign demand, population growth, and the expansion of the short-term rental market.
High rents continue to place significant pressure on households across the island, with analysts pointing to increased demand driven by foreign workers, demographic changes, and the growing popularity of short-term accommodation platforms.
Economist Giangos Hadjigiannis described Cyprus as a “victim of its own success,” arguing that the country has attracted substantial foreign investment and a large number of overseas workers, particularly in the technology sector.
According to Hadjigiannis, many of these professionals have higher purchasing power and are able to pay significantly more for accommodation than local tenants.
“When someone comes to Cyprus for one or two years, they need to settle quickly and are willing to pay a higher rent, whether it is covered personally or by their employer. They operate under different economic conditions compared to Cypriots,” he said.
He added that difficulties in accessing private home ownership are pushing an increasing number of young couples into the rental market, further boosting demand and driving up prices.
“When there is economic growth and prosperity, it is very difficult to keep property prices under control,” he noted.
Paulos Loizou, property valuer at Askwire, agreed that rising rents are directly linked to the significant increase in Cyprus’ population in recent years.
According to Loizou, approximately 70,000 people have relocated to Cyprus since 2021, including around 40,000 highly paid professionals.
He also pointed out that roughly 40% of tourists visiting Cyprus now stay outside licensed hotel establishments, opting instead for Airbnb properties and other forms of short-term accommodation.
Loizou further noted that the type of housing being developed is also a contributing factor, as much of the construction activity is focused on coastal apartments and units primarily intended for investment purposes.
He explained that many investors purchase properties worth around €300,000 to qualify for permanent residency status and subsequently use those properties for short-term rentals rather than long-term leasing.
“There is economic prosperity and a construction industry that is primarily focused on specific types of coastal developments. These units have little incentive to enter the long-term rental market,” he said.
Hadjigiannis reiterated that the influx of high-income foreign workers continues to have a direct impact on housing costs.
“They can afford to pay high rents, and that pulls the entire market upwards,” he concluded.
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