Source: cyprus-mail.com
Cyprus could gain firmer legal ground to restrict Airbnb-style rentals in areas where housing pressure can be proved under a European Commission proposal due later this year, but the island would first have to establish where the pressure exists and how much short lets contribute to it.
The Affordable Housing Act is still being prepared, meaning no EU-wide rental cap, licensing quota or ban has been agreed. Instead, the Commission says publicly available data should be used to identify “areas of housing stress”, where national, regional or local authorities could apply proportionate measures to protect housing affordability, including measures affecting short-term rentals.
This is not a blanket EU crackdown. The Commission also says restrictions must be accompanied by policies to increase supply, including new construction, the return of vacant properties to use, additional social housing and simpler planning and permitting.
For Cyprus, the proposal arrives as platform-based accommodation continues to expand while the authorities are still struggling to establish how much of the market is operating legally.
Eurostat recorded 7.64 million guest nights in Cyprus accommodation booked through Airbnb, Booking and Expedia in 2025, up 24.7 per cent from 6.12 million in 2024, according to the Eurostat data.
Growth continued into 2026. Cyprus recorded just over one million platform guest nights between January and March, an increase of 22.3 per cent from the first quarter of 2025. That was the fourth-highest growth rate in the EU, behind Malta, Slovenia and Slovakia, according to the latest quarterly figures.
The figures measure guest nights rather than properties or bookings. A family of four spending three nights in an apartment, for example, produces 12 guest nights. They therefore show demand for short-term accommodation, but not how many homes have been removed from the residential market.
The clearest official count of supply comes from a July Audit Office report, which said 8,464 licensed self-service accommodation units were registered with the Deputy Ministry of Tourism on May 6.
For scale, that number is equivalent to about 1.7 per cent of the 492,931 housing units counted in Cyprus’ 2021 census. However, the comparison is only indicative. The housing-stock figure is five years old, while registered accommodation may include second homes and properties built specifically for tourism rather than homes previously available to permanent residents.
More importantly, the Audit Office found that the official register may not capture the full market.
From a sample of 20 online listings that auditors were able to identify, only six were registered with a valid licence matching the state’s records. Ten displayed no registration number and did not appear in the register, while four displayed a number that was either invalid or related to another property.
A separate examination of 150 Airbnb and Booking listings in the Famagusta district found 23 properties, mainly villas and organised apartments, that could not be located in either the tourist accommodation register or the self-service accommodation register.
Those samples are too small and geographically limited to support the conclusion that 70 per cent of Cyprus short lets are illegal. However, they provide official evidence of gaps in registration, identification and enforcement. The Audit Office also identified limited use of information systems and insufficient interoperability between public authorities.
The report said the Deputy Ministry intended to promote legislation requiring additional certificates for registration and providing for on-site inspections. It did not set out any proposal for night limits, local quotas or restrictions linked specifically to housing affordability.
Since May 20, Regulation 2024/1028 has provided a common framework for collecting information from hosts and platforms. Where a member state operates a registration system or requests platform data, registration procedures must follow the EU framework.
Platforms can be required to display registration numbers, conduct random checks and share monthly information on stays, nights booked and individual accommodation units through a national digital entry point. Authorities can also request the removal of listings that fail to comply with registration requirements.
The regulation does not itself impose limits on short lets. Instead, it is intended to give authorities the evidence needed to decide whether further measures are justified.
That distinction matters because Cyprus is experiencing rising property prices, but there is no official evidence showing that short-term rentals are the principal cause.
The Central Bank index (CBC) showed residential prices increasing by 7.5 per cent year on year in the first quarter of 2026. Apartment prices rose by 10.8 per cent and house prices by 3 per cent. Overall prices increased by 9.1 per cent in Limassol, 8.9 per cent in Larnaca, 6.4 per cent in Paphos and 2.8 per cent in Nicosia, while Famagusta recorded no annual change.
However, the Central Bank attributed the increase primarily to demand from foreign buyers, followed by domestic demand and higher construction costs. It also said housing supply was gradually increasing. Its analysis did not identify short lets as the driver of the price rises.
The Commission has adopted a similarly cautious position. Its extensive housing assessment found that short-term rental activity across the EU increased by 93 per cent between 2018 and 2024.
Although listings represent an estimated 1.2 per cent of the EU’s total housing stock, their share reaches as much as 20 per cent in particular tourist centres and neighbourhoods. The Commission nevertheless concluded that a high concentration of short lets does not automatically create housing shortages or higher prices.
It said short lets can aggravate pressure, particularly where supply is already constrained, but warned that the relationship can run in both directions. Tourist rentals may increase housing demand, while platforms also tend to expand in locations where property is already expensive because of tourism, employment and investment demand.
The forthcoming Act could therefore matter less by creating entirely new powers than by clarifying the legal test for using them. In a 2020 court ruling, the EU’s highest court accepted that a shortage of long-term rental housing can justify prior-authorisation rules for short lets, provided the measures are necessary, non-discriminatory and proportionate.
Airbnb has welcomed improved data sharing but warned against blanket restrictions where short lets represent a small part of local housing. In its published position, the company called for “proportionate, targeted rules that address housing challenges where they truly exist”.
That would require Cyprus to move beyond nationwide property and tourism totals towards neighbourhood-level evidence on listings, professional operators, long-term rental availability and local prices. Nationally, 2.4 per cent of Cyprus residents faced housing-cost overburden in 2024, compared with 8.2 per cent across the EU, according to Eurostat figures.