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Short-term rentals like those on Airbnb are driving up housing costs in Cyprus, making long-term rentals unaffordable for many. The Cyprus Real Estate Agents Registration Council has called for a ban on these rentals to address the issue, as soaring prices are straining renters’ finances.

What impact are short-term rentals having on the Cyprus housing market?

Short-term rental properties, particularly through platforms like Airbnb, have been linked to increasing housing costs in Cyprus. This growth has reduced long-term rental availability, causing prices to surge, sometimes equal to a monthly salary, and has put significant financial strain on renters.

Government and Real Estate Council Address Rental Market Concerns

The Cyprus Real Estate Agents Registration Council has recently put forth a plea to the government, advocating for a prohibition on short-term rental properties. This sector, notably spearheaded by Airbnb, has seen significant growth, but with unintended consequences for the traditional rental market. The council argues that this boom in short-term rentals is a key driver behind the soaring housing costs, as it reduces the availability of properties for long-term rent. “This phenomenon is taking on alarming proportions,” the council remarked, pinpointing it as a central factor in the maintained high levels of rent for houses and apartments.

In response to this challenging climate, marked by steep inflation and surging interest rates, homeownership has become an uphill battle for many. The council observed a trend wherein an increasing number of citizens are resorting to renting. However, as the demand for rental properties climbs, the supply fails to match pace, leading to a situation where rental prices are often on par with a monthly salary, straining the financial capabilities of many renters.

Economic Vision and Fiscal Environment Stabilization

President Nikos Christodoulides emphasized the significance of a robust and consistent economic framework for Cyprus. During a discussion with the business community at the Presidential Palace, he flagged off an official dialogue aimed at bolstering the nation’s economy. Addressing business leaders directly, President Christodoulides acknowledged their role as central players in developing the economy and realizing ‘Vision 2035’ – an ambitious plan aiming to elevate Cyprus as a top-tier place to live and conduct business.

In addition, the president highlighted that a continuous economic strategy is vital, irrespective of potential shifts in the government. Such stability is crucial in nurturing a healthy fiscal environment that can withstand both current and future economic headwinds.

Industrial Growth and Green Initiatives

April 2024 marked a notable rise in Cyprus’ Industrial Turnover Index, with an increase of 11.1% compared to the same month in the previous year. The manufacturing sector particularly shone, posting a 13.8% increase and an index score of 137.7 points. Another standout was the water supply and materials recovery sector, which experienced a surge of 59.4%.

On the environmental front, the Paphos Chamber of Commerce and Industry (Evep) has collaborated with the European Affairs Unit to take part in the Green Synergy programme, backed by the European Union’s Erasmus+ programme. This initiative seeks to propel economic growth while emphasizing environmental sustainability. With over 250 individuals already benefiting from training, the programme’s primary goal is to reinforce and expand the business sector’s capacity and influence within the market, particularly during times when sustainability and adaptability are more important than ever.

Consumer Price Fluctuations and Stock Market Movements

The Cyprus Consumers Association reported a price hike for ice cream and various summer commodities this June. The increase aligns with the Consumer Price Index data for June 2024, showcasing an 8.07% rise in ice cream prices. Furthermore, domestic holiday packages and hotel stays saw significant increases of 11.8% and 7.76%, respectively. This trend of price elevation extended to other products, including dried meats, yoghurts, and food processing appliances, as well as fresh fruits, indicating a broader inflationary pressure during the summer months.

Meanwhile, the Cyprus Stock Exchange ended a trading day with modest gains. The general market index nudged up by 0.09%, with transaction values totaling €52,460. Sub-indexes saw varied movements, with some witnessing slight increases while the hotel index remained unchanged. Investment interests were diverse, with notable activities in stocks such as Hellenic Bank, Demetra, and K+G Complex, among others.

What impact are short-term rentals having on the Cyprus housing market?

Short-term rental properties, particularly through platforms like Airbnb, have been linked to increasing housing costs in Cyprus. This growth has reduced long-term rental availability, causing prices to surge, sometimes equal to a monthly salary, and has put significant financial strain on renters.

What actions are being taken to address the rental market concerns in Cyprus?

The Cyprus Real Estate Agents Registration Council has advocated for a ban on short-term rental properties, especially those on platforms like Airbnb, to tackle the issue of soaring housing costs. The government is being urged to address the imbalance between short-term and long-term rental availability.

How is the economic vision of Cyprus being shaped for the future?

President Nikos Christodoulides is engaging in discussions with the business community to strengthen Cyprus’ economy and achieve ‘Vision 2035,’ aiming to position Cyprus as a top destination for business. A stable economic framework is highlighted as crucial for navigating economic challenges and fostering growth.

What recent industrial and environmental initiatives have been undertaken in Cyprus?

Cyprus has seen growth in its Industrial Turnover Index, particularly in the manufacturing and water supply sectors. Additionally, initiatives like the Green Synergy programme, supported by the European Union, are being implemented to drive economic growth while prioritizing environmental sustainability.

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