MOST YOUNG COUPLES IN CYPRUS CANNOT AFFORD TO BUY PROPERTY

Inflation, rising real estate prices, and stringent loan conditions have led to most young families in Cyprus being unable to afford an apartment or house. Phileleftheros has described the dream of owning a home as a utopia.

INFLATION

The inflationary spiral began during the coronavirus pandemic and was exacerbated by the war in Ukraine. Today, we are paying at least 20 percent more for many products and goods than we did five years ago.

Economist Stelios Platis stated in a Philenews podcast that the middle class in Cyprus is becoming impoverished. He noted that if a family's income was 3,000 euros per month in 2021, it is now equivalent to 2,460 euros.

The cancellation of subsidies for gasoline and diesel fuel on April 1 is expected to contribute to inflation in the second half of spring 2024. This affects almost everyone, as personal vehicles are essential for getting around in Cyprus.

RISING REAL ESTATE PRICES

The mass relocation of highly paid foreigners to Cyprus has led to a surge in demand for real estate, naturally driving up prices. Additionally, increased costs of building materials and their transportation have contributed to the rise.

STRICT BANK POLICIES

Cypriot banks have tightened the criteria for granting real estate loans. According to Phileleftheros, employees in the private sector and the self-employed are often classified as "high risk" by banks.

Credit department staff meticulously check mortgage applicants, monitoring banking transactions and data in the ARTEMIS system, which registers all clients with loans.

One obstacle to obtaining loans is the down payment, which amounts to about a third of the property's value. As a result, even apartments offered under social housing schemes remain in low demand.

Another barrier is the sharply increased interest rates. According to Stelios Platis, while a family previously paid 500 euros per month to service a 100,000-euro bank loan, they now have to pay 750 euros per month.

RENTING IS NOT AN OPTION EITHER

The inability to purchase housing pushes young families towards renting. However, rental prices have skyrocketed over the past five years. If you manage to find something for 500-600 euros a month, consider yourself very lucky.

Owners of apartments in older buildings often rent to third-country nationals who live in groups of 15-20 people, each paying 100 euros a month. This phenomenon leads to the formation of ghettos in city centers, where old housing stock predominates.

Additionally, many property owners prefer to list their properties on the short-term rental market, which increases their income during the peak tourist season. This results in a shortage of housing in the long-term rental market.