Urban development and investment trends
Short-term rentals have significantly reshaped city landscapes and living patterns in Cyprus, raising questions about their investment value for property owners and buyers.
Polys Kourousides, President of the Cyprus Real Estate Sciences Association, and Konstantinos Karakontis, President of the Self-Catering Accommodation Association, discussed the sector on SIGMA’s “Mesimeri kai Kati” programme.
Kourousides noted that in certain urban areas, the trend towards converting apartments into self-catering units is evident, contributing to development. “We have not become like Athens,” he clarified, highlighting the importance of proactive planning to avoid housing shortages seen in other European cities.
Popular areas and licensing
Most self-catering properties are located in coastal cities such as Paphos, Famagusta, and Larnaca, with a significant presence in Limassol. Nicosia has fewer units, although recent growth has been observed, mainly in the city centre.
Karakontis added that in the past 18 months, 75–80% of such accommodations have been licensed with support from the Deputy Ministry of Tourism, and the new EU regulations, effective from 20 May, are expected to increase this percentage further.
Yields and legislation challenges
The sector has contributed to the renovation of older buildings, especially in city centres, often resulting in higher yields compared with long-term rentals. However, legislative weaknesses in long-term leasing discourage many owners.
Kourousides explained that current laws, which largely protect tenants, prompt some property owners to shift towards short-term rentals. The difficulty of removing non-paying tenants limits the supply of long-term rentals, driving rents higher.
Karakontis stressed that profitability depends heavily on property location, with factors such as proximity to city centres or beaches, and the overall guest experience, playing a decisive role in investment decisions.
Also read: Non-systemic banks are disappearing in Cyprus
For more videos and updates, check out our YouTube channel
