15.07.2024
The short-term rental market, dominated by online platform Airbnb, has come under fire from the Cyprus Real Estate Agents Registration Board and the Cyprus Tourism Enterprises Association (Stek), among others.
The president of the Cyprus Real Estate Agents Registration Board, Marinos Kineirou, said that “the current practice of short-term rentals creates many problems in key sectors of the economy such as tourism and real estate,” citing the loss of tax revenue for the state as well as the negative impact on local residents.
Quineiro noted that short-term rentals, especially apartments, lead to higher rental prices by reducing the supply of long-term rentals.
This is compounding the rise in rental prices as many properties are taken off the market during times of high demand due to high interest rates and inflation, making it difficult to purchase residential property .
The Council stressed that this phenomenon is gaining alarming proportions and is largely responsible for the rapid rise in rental prices of houses and apartments , keeping them at a high level. In conditions of inflation and high interest rates, more and more Cypriot citizens are turning to renting residential real estate . Demand for rentals is growing, but supply is not increasing enough, causing prices to rise.
The Association of Cyprus Tourism Enterprises ( Stek ) has also raised concerns about short-term rentals, noting that 37% of Cyprus accommodations are such properties. According to the association, there are about 15,000 short-term rentals on the market, while only 7,200 are officially registered. The association proposed limiting rentals to 90 days a year, introducing fees and adopting safety regulations to address the housing shortage and the impact on local communities.
In response to this criticism , Kotzias said that short-term rentals meet the requirements of modern tourists, who increasingly prefer this type of accommodation. He argues that these companies do not compete directly with hotels and should not be treated as such, advocating for a common regulatory framework to ensure fair competition without suppressing the market. Kotzias emphasized that short-term rentals create jobs, bring direct and indirect income to the state, and attract international and local investors.
Kotzias rejected the idea that short-term rentals are to blame for rising rental prices, pointing to limited residential supply, rising property prices and rising costs. Kotzias added that short-term rentals are less common in urban centers, where rental problems are most acute , and that property owners often prefer short-term rentals to avoid problems with long-term tenants.
Kotzias expressed doubts about the wisdom of limiting short-term rentals in tourist areas such as Famagusta and Paphos, fearing it might not meet the needs of tourists and undermine investor confidence. He also noted that banning short-term rentals would not solve the underlying problems and could lead to even greater losses from potentially bad long-term tenants. Kotzias called for proper regulation and a uniform operating environment for short-term rentals, saying decisions that go against market forces are doomed to fail.
