Housing crisis in Cyprus with far-reaching consequences – call for European action
Housing crisis in Cyprus with far-reaching consequences – call for European action
The housing crisis has long since ceased to be a marginal phenomenon, but has profound social and economic effects and therefore requires a coordinated European response. This was stated by Interior Minister Constantinos Ioannou on Wednesday evening to journalists accredited in Brussels who are currently in Cyprus.
According to the minister, the tense housing situation is affecting key areas such as social cohesion, economic stability, demographic development, labour mobility and the population's trust in state institutions.
Without sufficient access to affordable and adequate housing, it is neither possible to attract and retain workers, nor to support families in the long term or to secure Europe's competitiveness, Ioannou stressed.
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Although housing policy remains a national responsibility, the causes of the current crisis extend beyond national borders. Against this background, it had become clear that a coordinated European approach was needed. Affordable housing should not be understood as a social burden, but as a strategic investment in Europe's future viability and resilience.
As part of its EU Council Presidency, Cyprus therefore wants to promote the four central pillars of affordable housing, which are in line with the European Plan for Affordable Housing.
These pillars aim to increase the supply of housing by reducing bureaucratic hurdles and accelerating approval procedures, mobilising public and private investment, providing direct support – in particular to combat energy poverty – and targeting the protection of particularly vulnerable households.
Ioannou also acknowledged that short-term rentals are putting additional strain on the housing market, as properties are increasingly being used for tourism and are being removed from the permanent housing market.
As an example of national measures, he pointed to Cyprus, where the processing time for building permits has been reduced from up to 18 months to around 40 days in certain cases. At the same time, construction activity has been intensified in order to increase the supply of affordable housing.
In his view, pure financial support for the population without a simultaneous expansion of the offer is not expedient, as this would only lead to further rising prices. Rather, the right balance is decisive: more apartments on the market and targeted help for those who actually need it.
At the European level, the exchange of best practices is of great importance, the Minister stressed. At the same time, each solution must be adapted to local conditions.
There can be no one-size-fits-all solution, as administrative structures and needs differ from country to country and from city to city. The European approach should therefore serve as an overarching framework that provides tools and guidelines so that member states and municipalities can implement tailor-made measures for their respective contexts.
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There is also a heated housing crisis in Mallorca and the Balearic Islands/Spain!
The housing crisis in Mallorca has continued to worsen at the beginning of 2026. The island is facing massive social challenges due to extreme housing shortages and record prices.
Current situation in 2026
- Housing shortage: According to estimates, around 55,000 people will be looking for affordable housing in Mallorca in 2026. At the same time, more than 24,000 rental contracts expire in the Balearic Islands this year alone, which poses existential problems for many households.
- Price development: The average price per square metre for real estate is around €5,000, while in the luxury segment it often exceeds €10,000. For 2026, a further increase in value of up to 10% is expected in the premium segment.
- Living conditions: The precarious situation is increasingly forcing locals into illegal or unreasonable living conditions, such as living in mobile homes, basements or overpriced mini-apartments.
Main causes of the crisis
- Foreign ownership: In some municipalities, almost every second property (over 40%) is in foreign hands. This fuels speculation and permanently deprives the local market of housing.
- Tourism focus: The prioritization of luxury tourism and vacation rentals is pushing the local population out of their neighborhoods.
- Scarce supply: There is hardly any new building land and the administrative hurdles for new construction projects are high, which artificially tightens supply.
Political measures and discussions 2026
- Purchase restrictions: In Madrid and on the islands, there is intensive talk about a purchase ban for non-residents to stop the sell-out of the island. However, legal enforcement at EU level remains difficult.
- Tax rebates instead of rent caps: The current Balearic government is increasingly relying on tax incentives to encourage landlords to rent out long-term instead of hard rent caps.
- Rent control: Nevertheless, some municipalities are calling for structural reforms and the capping of real estate prices in order to slow down social displacement.
Source: CyprusMail.com with kind permission for editorial use
Author: Rebekah Gregoriades
