Cyprus is experiencing a significant increase in residential construction, yet finding an affordable home remains a challenge. New figures and comments from Interior Minister Constantinos Ioannou have brought renewed attention to the growing gap between housing supply and demand.
The question facing the property market is increasingly clear: if more homes are being built, why are rental prices continuing to rise?
Rental Costs Have Increased Sharply
In a parliamentary question, ALMA MP Litsa Drousiotou highlighted figures showing that the apartment rental index increased by approximately 56.5% between the final quarters of 2020 and 2025.
The index recorded another 7.36% year-on-year increase in the second quarter of 2026.
These increases occurred despite the completion of 8,692 homes in 2024 and continued growth in construction activity.
The figures raise an important question about whether building more properties is sufficient to improve affordability.
Population Growth and Economic Activity
According to the interior minister, several developments have placed additional pressure on the housing market since 2022.
These include population growth, people arriving from Ukraine after the outbreak of war, and the relocation of international businesses and their employees to Cyprus.
At the same time, inflation and rising construction, energy and financing costs have made housing development more expensive.
The minister described increasing supply as essential to restoring balance, while acknowledging that the eventual effect on prices cannot be predicted accurately.
Building Activity Continues to Expand
Official figures show that Cyprus issued 8,159 building permits in 2025, compared with 6,827 in 2024.
The increase continued during the first five months of 2026, when 3,650 permits were issued, representing annual growth of 32.1%.
Those permits provided for 8,978 residential units, compared with 5,484 during the corresponding period of 2025.
However, building permits represent planned construction, not homes immediately available to buyers or tenants.
Can Affordable Housing Schemes Make a Difference?
The government is promoting planning incentives and Build to Rent initiatives designed to increase housing availability.
According to estimates presented by Ioannou, the schemes could support the development of more than 4,000 residential units over two years, including approximately 1,400 affordable homes.
More than €22 million is also expected to be contributed to the Special Affordable Housing Fund.
These projections depend on the completion of planned developments and should not be treated as guaranteed deliveries.
What Comes Next for Cyprus Property?
For prospective buyers, tenants and property developers, the main uncertainty is how quickly additional housing can become available and whether it will match local demand.
Greater construction activity is a positive indicator of future supply, but the timing, location and affordability of completed properties will remain important.
The central challenge for Cyprus is no longer simply encouraging more construction. It is ensuring that new housing helps meet the needs of the people looking for somewhere to live.