Shift in homeownership trends in Cyprus
Around 20-25 years ago, Cyprus was renowned for having one of the highest rates of homeownership globally, with figures nearly reaching 78-80%, as per the data available then. This statistical achievement often garnered admiration during discussions, both substantive and academic, as such high rates were uncommon in comparable contexts elsewhere.
This perception suggested a stable, almost constant variable rather than a subject of ongoing research interest. However, over the past quarter-century, the landscape has shifted significantly.
Today, Cyprus’ homeownership rate stands at 69.8%, a notable decrease from the 78-80% observed previously. Conversely, the rental rate has surged from approximately 20-22% to its current 30.2%. Comparatively, these figures align closely with the European Union average, where homeownership averages 69.9% and rentals make up 30.1%.
Examining dwelling preferences within Cyprus, approximately 73% of homeowners prefer houses, with the remaining 27% opting for apartments. In contrast, the EU average leans toward apartments, chosen by around 47% of residents.
Several socioeconomic factors underpin these shifts:
1. A rapid rise in property prices driven by increased demand, both domestic and foreign, and a sluggish supply response.
2. Previous over-lending practices that artificially inflated reported homeownership rates.
3. Prolonged wage stagnation exacerbated by inflationary pressures.
4. The 2009-2012 financial crisis and subsequent 2013 bankruptcy, which reset homeownership rates at more realistic levels.
5. Decreased parental financial support for housing acquisitions over time.
6. Growing investment in income -generating properties, diverting capital from homeownership.
7. Changing lifestyle preferences among younger generations favoring early independence and smaller, rental-friendly accommodations.
8. Delayed cohabitation between couples, pushing homeownership decisions to later stages of life.
9. Long-term demographic trends impacting housing choices.
10. Increasing divorce rates affecting homeownership dynamics.
11. Growth in foreign student and employee populations, contributing to higher rental demand.
