Housing Pressures in Cyprus Intensify as Young Borrowers Struggle to Access Home Ownership

Cyprus is facing an increasingly severe housing challenge that is placing growing pressure on young people and first-time homebuyers, according to the Cyprus Borrower Protection Association (Syprodat), which is urging swift and meaningful action as the European Union steps up efforts to address rising housing costs across the bloc.

This week, Syprodat said a newly unveiled European Commission initiative on affordable housing underscores the urgent need for comprehensive and effective housing policies at the national level in Cyprus. The association warned that young people and first-time borrowers are finding it increasingly difficult to enter the property market as house prices and rents continue to climb, while access to credit becomes more restrictive.

According to Syprodat, the European Commission’s proposal highlights the fact that “the housing crisis in Cyprus has reached particularly worrying levels.” It stressed that the situation “directly affects young workers and young families seeking to purchase their first home in an environment marked by escalating property prices, high rental costs and strict banking criteria.”

The association explained that in recent years, young employees and newly formed households have been “confronted with a combination of increased housing purchase costs, elevated mortgage interest rates, higher own-capital requirements and limited access to affordable housing, especially in urban centres.” As a consequence, many prospective buyers are either burdened with disproportionately high monthly loan repayments or excluded altogether from the first-home market.

Syprodat noted that this reality leaves a large number of young people stuck in expensive rental arrangements or reliant on financial support from their families. “The proposal of the European Commission to strengthen the supply of affordable housing, improve the use of European financing tools and support vulnerable groups confirms that the problem is not individual but structural and requires coordinated policy interventions at both national and European level,” the association said.

It added that, for Cyprus, the European initiative makes it essential to introduce effective housing schemes for young people and first-time borrowers, realistic mortgage restructuring frameworks, and policies that ensure access to home ownership does not turn into a lifelong financial strain.

Syprodat also emphasised its continued advocacy role, stating that it “stands alongside young borrowers and young people fighting to secure the right to housing.” The association further pledged that it will “continue to highlight the issue, push for substantive solutions and intervene with proposals and positions so that housing ceases to be a privilege and is safeguarded as a basic social right for all.”

At the European level, the European Commission earlier this week presented its first-ever European Affordable Housing Plan, formally recognising that access to affordable, sustainable and good-quality housing has become one of the most pressing challenges facing citizens across the EU.

According to the commission, average house prices across the bloc have risen by more than 60 per cent over the past decade, while rents have increased by more than 20 per cent.

These trends have left millions of Europeans struggling to secure housing they can afford.

The commission warned that the housing crisis is having far-reaching consequences, undermining labour mobility, access to education and family formation, while also weakening social cohesion and the overall competitiveness of the EU economy.

The commission stressed that tackling the problem requires a genuinely European approach grounded in local realities, with the EU stepping in where it can add value for member states, regions and cities. The Affordable Housing Plan is built around boosting housing supply, stimulating investment and reforms, addressing the impact of short-term rentals in areas under severe housing pressure, and supporting the groups most affected by the crisis.

It also outlines measures aimed at making the construction and renovation sector more productive and innovative, while addressing the growing mismatch between housing supply and demand through a European Strategy for Housing Construction.

As part of the broader package, the commission included a communication and a council recommendation on the New European Bauhaus, an initiative that promotes sustainable, affordable and high-quality projects in the built environment, while supporting the clean transition, innovation and the bioeconomy.

The New European Bauhaus Academy is designed to reskill and upskill the construction ecosystem for sustainable and circular building practices, while also strengthening innovation and research in the sector. Alongside this, the commission announced revisions to EU state aid rules to make it easier for member states to financially support affordable and social housing.

Efforts are also under way to simplify planning and permitting procedures that restrict housing supply, while a new legislative initiative on short-term rentals is planned to support regions experiencing acute housing stress.

To date, the commission has mobilised €43 billion in housing-related investments and said it will continue to do so under the next long-term EU budget. It also plans to develop a new pan-European investment platform together with the European Investment Bank and other partners.

The Affordable Housing Plan is expected to deliver particular benefits for young people, students, essential workers, low-income households and other vulnerable groups, with new investment foreseen in student accommodation and social housing, as well as stronger support for efforts to tackle homelessness.

Implementation of the plan will now proceed through a newly established European Housing Alliance, which will bring together EU institutions, member states, regions, cities, housing providers, social partners, industry representatives and civil society organisations. The alliance is expected to deliver a progress report before the end of the European Commission’s current mandate, alongside preparations for the first-ever EU Housing Summit, scheduled to take place in 2026.

By fLEXI tEAM