14.04.2024
Cypriots are being forced out of the property market because they cannot afford to rent an apartment due to rising rents.
Although the island’s property sector is showing a strong recovery despite the uncertainty caused by the energy crisis, the property market is difficult for local residents.
The real estate market is struggling to stabilize as construction costs increase by more than 30% and mortgage rates rise, causing prices to rise.
The Cypriot economy has not escaped changes due to the war in Ukraine and the conflict in the Middle East, with inflation rising rapidly, especially affecting the most vulnerable groups of the population. Unfortunately, this has caused Cypriot households to think twice about borrowing to buy their dream home as demand for mortgages has fallen.
Cypriots are further marginalized as renting an apartment or house has become a nightmare, especially in Limassol and the capital Nicosia where prices are so high.
The ever-increasing number of high-tech and fintech companies moving to Cyprus, while boosting the economy, is making life difficult for locals looking for an apartment to rent. These companies attract their employees, who have higher salaries and can afford higher rents. Employees of these companies usually prefer new properties, making them unaffordable for Cypriots with lower incomes.
It seems that in all cities of Cyprus, demand exceeds supply. Any new residential project is sold as planned and during construction, especially in Nicosia and Limassol , and there are few apartments that can be rented at a price acceptable to Cypriots.
Limassol out of reach
According to Danos International Property Consultants and Assessmenters , renting a one-room apartment in Limassol costs at least 850 euros per month, and a two-room apartment will cost at least 1,300 euros. Renting a three-room apartment in this area is almost impossible on a Cypriot salary, since the rent is around 1,700 euros per month.
According to recent data from CyStat , the average gross monthly earnings of Cypriots rose to €2,693 in the fourth quarter of 2023 from €2,535 in the previous year, reflecting an increase of 6.2%. Seasonally adjusted data for the same period shows average monthly earnings of €2,402, up 1.6% from the third quarter of 2023. However, CyStat data also indicates that more than half of the island’s employees earn an average of €1,500. The minimum monthly wage in Cyprus is set at €1,000.
In Nicosia, rent for a one-room apartment ranges from 550 to 650 euros, and a two-room apartment will cost a family at least 750 euros. However, renting an 85 square meter apartment in a suburb of the capital, such as Engomi , costs 900 euros per month. The cost of renting a three-room apartment in the capital ranges from €950 to €1,500. Nicosia residents looking for cheaper alternatives have to move to suburbs such as Lakatamia , where rents are lower.
Rents in Larnaca and Paphos are currently lower as interest from foreign investors and high-tech companies looking for a Cyprus base in the coastal cities increases. Rent for a one-room apartment ranges from 450 to 550 euros. Two-room apartments cost between 550 and 650 euros, while three-bedroom apartments cost between 750 and 850 euros.
Prices shown are indicative and depend on location, age and other characteristics of the property.
