Cyprus Proposes Ban on Short-Term Rentals

The Cyprus Real Estate Agents Registration Council has proposed banning short-term property rentals, arguing that such a measure is necessary to protect consumer rights, stabilize the real estate market, uphold tourism standards, and preserve the country’s international reputation, Cyprus Property News reports.

The initiative comes as a response to the rapid expansion of the short-term rental sector, which in recent years has grown to rival the hotel industry in scale. This surge has reduced the availability of properties for long-term rental and, when combined with high interest rates and inflation, has driven up both rental and property sale prices.

The Rapid Growth of Short-Term Rentals

Deputy Minister of Tourism Costas Koumis previously stated that the number of registered short-term rental properties in Cyprus has risen sharply. In April 2023, there were 4,765 registered units, while by 2025, this number had reached 8,248, collectively providing 36,640 bed spaces. However, industry estimates suggest that the actual number of such properties on the island ranges between 80,000 and 90,000, with only about 30% officially registered.

The hotel sector, which has been developed over 50 years and currently includes around 90,000 licensed rooms, is now facing intense competition from short-term rentals, which have reached similar capacity in just a decade. This situation has raised concerns among industry professionals, prompting calls for government intervention.

Lack of Regulation and Quality Standards

The Cyprus Real Estate Agents Registration Council also highlighted the lack of regulation in the short-term rental sector. Many properties fail to meet safety and quality standards, damaging the country’s tourism reputation and creating unfair competition for licensed accommodation providers who comply with government regulations.

The proposed changes aim to strengthen oversight and bring order to the market. However, the Ministry of Tourism believes that different regions in Cyprus require tailored regulatory approaches. For example, Nicosia and coastal areas face vastly different challenges, making a one-size-fits-all policy potentially ineffective.

A Global Challenge: How Other Countries Are Responding

Cyprus is not alone in grappling with the unregulated growth of short-term rentals. Several major cities, including Barcelona, New York, and Athens, have implemented restrictions or outright bans to curb real estate speculation and support the hotel industry.

The European Union has also recognized short-term rentals as a challenge requiring strict regulation. The EU’s new policy framework focuses on enhancing transparency, collecting data on short-term rentals, and developing legislative tools to help member states regulate the sector more effectively.

Potential Consequences of a Short-Term Rental Ban in Cyprus

If Cyprus bans or significantly restricts short-term rentals, several key outcomes are expected:
- More properties will enter the long-term rental market, increasing availability and lowering rental prices.
- Tourists will shift back to hotels, improving occupancy rates and profitability in the hospitality sector.
- Property investors who bought real estate for short-term rentals may lose income, potentially leading to reduced tax revenues and impacting the national budget.
- A black market for rentals could emerge, making enforcement more difficult and reducing state control over the sector.

The Debate Continues

The discussion on regulating short-term rentals in Cyprus is ongoing. On one hand, the sector has contributed to economic growth and increased tourism revenue. On the other, its uncontrolled expansion has created challenges in the real estate and hospitality industries.

Cyprus’ final decision on short-term rentals could serve as a precedent for other European nations considering similar regulatory measures.