Cyprus must act as EU tackles rising housing costs, says Syprodat

The Cyprus Borrower Protection Association (Syprodat) this week announced that a new European Commission initiative on affordable housing highlights the urgent need for substantive housing policies in Cyprus.

Syprodat explained that young people and first-time borrowers are struggling to access home ownership amid rising prices, rents and tighter lending conditions.

The association said the European proposal underlines how “the housing crisis in Cyprus has reached particularly worrying levels”.

It added that it “directly affects young workers and young families seeking to purchase their first home in an environment marked by escalating property prices, high rental costs and strict banking criteria”.

According to Syprodat, recent years have seen young employees and new households “confronted with a combination of increased housing purchase costs, elevated mortgage interest rates, higher own-capital requirements and limited access to affordable housing, especially in urban centres”.

As a result, the association said a large number of new borrowers are either forced to shoulder disproportionately high monthly instalments or are excluded entirely from the first-home market, remaining trapped in expensive rental arrangements or dependent on family support.

“The proposal of the European Commission to strengthen the supply of affordable housing, improve the use of European financing tools and support vulnerable groups confirms that the problem is not individual but structural and requires coordinated policy interventions at both national and European level,” Syprodat said in its statement.

It added that for Cyprus, the European initiative makes it imperative to introduce meaningful housing schemes for young people and first-time borrowers, realistic mortgage restructuring frameworks and policies that ensure home ownership does not become a lifelong financial burden.

The association further stated that it “stands alongside young borrowers and young people fighting to secure the right to housing”.

It also stressed that it will “continue to highlight the issue, push for substantive solutions and intervene with proposals and positions so that housing ceases to be a privilege and is safeguarded as a basic social right for all”.

In more detail, the European Commission earlier this week presented its first-ever European Affordable Housing Plan, acknowledging that access to affordable, sustainable and good-quality housing has become one of the most pressing challenges facing European citizens.

According to the commission, average house prices across the EU have risen by more than 60 per cent over the past decade, while rents have increased by more than 20 per cent, leaving millions struggling to find housing they can afford.

The commission warned that the housing crisis is undermining labour mobility, access to education and family formation, while also weakening the competitiveness of the EU economy and social cohesion.

It stressed that addressing the crisis requires a genuinely European effort rooted in local realities, with the EU stepping in where it can add value for member states, regions and cities.

The Affordable Housing Plan focuses on increasing housing supply, triggering investment and reforms, tackling short-term rentals in areas under housing stress and supporting the groups most affected by the crisis.

It also proposes measures to make the construction and renovation sector more productive and innovative, addressing the mismatch between housing supply and demand through a European Strategy for Housing Construction.

As part of the package, the commission included a communication and a council recommendation on the New European Bauhaus, which promotes sustainable, affordable and high-quality projects in the built environment while supporting the clean transition, innovation and the bioeconomy.

The New European Bauhaus Academy aims to reskill and upskill the construction ecosystem for sustainable and circular construction, while boosting innovation and research in the sector.

The commission also announced revised EU state aid rules to make it easier for member states to financially support affordable and social housing, alongside efforts to simplify planning and permitting procedures that restrict housing supply.

A new legislative initiative on short-term rentals is also planned to support areas facing acute housing pressure.

So far, the commission has mobilised €43 billion in housing-related investments and said it will continue to do so under the next long-term EU budget, while also developing a new pan-European investment platform with the European Investment Bank and other partners.

The plan is expected to particularly benefit young people, students, essential workers, low-income households and other disadvantaged groups, with new investment foreseen in student and social housing and stronger support for tackling homelessness.

Implementation will now move forward through a new European Housing Alliance.

The alliance will bring together EU institutions, member states, regions, cities, housing providers, social partners, industry and civil society.

This will result in a progress report, due before the end of the commission’s current mandate, and the first-ever EU Housing Summit scheduled for 2026.