Cyprus faces severe housing affordability crisis as prices outpace incomes

Housing prices in Cyprus have surged, rising about 52.9% between 2015 and 2025, while rental costs increased around 26% in the same period. As a result, the average home now costs roughly ten times the average annual salary, up from eight times in 2015, making home ownership increasingly out of reach for many Cypriot families.

The surge is linked to foreign investment driven by the Citizenship by Investment Programme, which attracted billions of euros until its termination in 2020. Developers focused on high‑end villas and luxury apartments for affluent buyers, limiting the supply of affordable housing. Concurrently, an influx of foreign professionals after the Ukraine war and other regional conflicts boosted demand and further pushed up prices.

Household data show that Cypriot families earn less than their euro‑area counterparts. The median annual gross income per household was €30,900 in 2023 versus €37,100 EU‑wide. The bottom 20% earn €10,300, with only 9.8% able to save, and their debt‑service‑to‑income ratio stands at 56.7%, far above the EU average of 19.2%. Middle‑income households earn €29,700, about 20% below the EU median, and only 15.1% can save. Young households (16‑34) earn €24,000, over 30% less than peers in the euro area, with just 18.2% able to save for housing. These income gaps and high debt ratios deepen the affordability crisis.