Rents in Cyprus have risen by 56.5%. More permits bring no relief.

Rents in Cyprus continue to rise despite an increase in the number of apartments and the issuance of building permits. The apartment occupancy rate increased by 56.5% between the end of 2020 and the end of 2025. The second quarter of 2026 saw a 7.36% increase compared to the same period a year earlier.

Interior Minister Konstantinos Ioannou points to a combination of rising demand and construction costs. He cites the influx of people fleeing the war in Ukraine and the relocation of foreign companies and their employees as among the reasons. However, the ministry is unable to predict when the increased housing supply will result in a price drop.

Rents in Cyprus. What does a 56.5% increase mean?

The data was cited in a parliamentary question by MP Litsa Drousiotou. It concerns the apartment rent index, which increased from 100 to 156.5 points between the fourth quarter of 2020 and the fourth quarter of 2025.

This doesn't mean that every tenant received a raise of exactly 56.5%. The indicator shows the change in market values in the analyzed category.

Separate information is 7.36% year-on-year growth in Q2 2026This is not the result for the entire year 2026, nor is it the change calculated from the end of 2025. Therefore, these two values should not be simply added together.

However, the scale of the increase remains significant. For those looking for a new apartment, this means entering a market that's significantly more expensive than it was a few years ago.

More residents and higher construction costs

In response, the minister pointed out that housing problems have intensified since 2022. Demand for housing has increased, while the prices of energy, raw materials, and construction materials have also increased.

Demand was driven by population growth, the arrival of people fleeing the war in Ukraine, and the relocation of foreign companies to Cyprus. Companies brought their employees and their families with them.

These are several factors that interact. The information presented does not specify the share of rent growth attributed to each of these groups.

Therefore, they don't provide a basis for attributing the entire problem to Ukrainian refugees or foreign workers. The Minister describes an imbalance between demand and available supply, further burdened by the costs of implementing the investment.

Permits are increasing, but you have to wait for premises

From January to May 2026, the following were issued: 3,650 building permits, compared to 2,764 in the same period of the previous year. This represents an increase of 32.1%.

The number of apartments planned in the investments covered by them increased from 5,484 to 8978, i.e. by 63.7%.

However, these are planned units, not apartments already handed over to tenants. The time between obtaining the permit and the completion of construction is required for financing, organizing the work, and implementing the project.

Where the apartments are being built, their standard, and the target audience are also important. An increase in the number of units doesn't necessarily mean an equally large increase in apartments available to average-income households.

Over 4,000 apartments in the government's plans

The Ministry points to the program Build to Rent and urban planning incentives. These mechanisms allow for increased development density in exchange for the creation of additional housing, including affordable housing.

According to ministerial estimates, the programs may bring over 4,000 apartments in two years. About 1400 is intended to expand the offer of affordable housing.

These are projected program outcomes, not the number of completed units. The entire pool should not be represented as units already available for rent.

Will Schengen increase demand for housing?

The parliamentary question also raised the issue of the possible impact of Cyprus joining the Schengen area.

The Minister stressed that at this stage it is not possible to reliably determine whether and to what extent this would affect demand and real estate prices.

Greater mobility among businesses, workers, and investors could increase interest in apartments. However, this is not a confirmed prediction of another wave of price increases.

When will tenants feel the improvement?

The ministry did not provide a specific date for the rent decrease or the scale of the potential reduction. It also acknowledges that it is difficult to precisely determine the number of apartments needed to address the shortage.

Increasing supply is intended to help balance the market. However, the final effect depends on the completion of investments, their location, prices, and subsequent changes in demand.

For tenants, the most important thing will be not the speed of issuing permits, but the number of finished apartments that will actually appear in their corresponding price range.