Cyprus Prepares to Regulate Short-Term Rentals Amid Rising Housing Demand

Cyprus is moving closer to acquiring stronger legal tools to regulate short-term rentals such as Airbnb in neighborhoods where housing pressure is clearly proven. However, any regulatory action will rely heavily on solid data demonstrating where housing stress exists and the extent to which short lets contribute to it.

EU Affordable Housing Act Sets the Framework

The European Commission is set to introduce an Affordable Housing Act later this year. Unlike calls for a blanket EU-wide cap or ban, the focus is on enhancing transparency through publicly available data pinpointing localized “areas of housing stress.” This will empower national and local governments, including Cyprus, to implement proportionate restrictions on short lets when necessary.

These restrictions, however, are designed to be part of a multifaceted approach—including boosting home construction, reactivating vacant properties, expanding social housing, and expediting planning permissions—to tackle affordability challenges comprehensively.

Short-Term Rental Growth in Cyprus: A Double-Edged Sword

Cyprus has witnessed a rapid surge in platform-based short-term stays. Eurostat reported 7.64 million guest nights booked through platforms like Airbnb, Booking.com, and Expedia in 2025, marking a 24.7% rise compared to 2024. In early 2026, platform guest nights reached over one million from January to March alone, reflecting a 22.3% year-on-year growth—the fourth fastest in the EU.

It’s important to clarify that these figures indicate guest demand rather than the number of properties used as short lets. For example, a single family staying three nights accounts for multiple guest nights, so these statistics don’t directly quantify how many homes have exited the long-term rental market.

Audit Report Highlights Shortcomings in Rental Licensing

The most authoritative data on supply comes from a July Audit Office report, which identified 8,464 licensed self-service units as of May 6—roughly 1.7% of Cyprus’ nearly 493,000 homes recorded in the 2021 census. While this offers a rough scale of licensed units, it isn’t a precise match for rental market size.

The report also uncovered compliance gaps: in a sample of 20 online listings, only six had valid, matching licenses; ten lacked registration numbers entirely, and four used invalid or mismatched numbers.

Similarly, a targeted review in Famagusta discovered 23 listings absent from official tourism registries. Although these samples are limited, they expose weaknesses in registration accuracy, data sharing, and enforcement efforts.

New EU Rules Boost Transparency but Don’t Limit Rentals

From May 20, EU regulation 2024/1028 introduced a common system for gathering data from short-term rental platforms. This mandates platforms to display registration numbers, conduct random compliance checks, share monthly data on listings, stays, and nights, and respond to authorities’ requests to remove non-compliant offers.

These regulations don’t themselves impose rental caps but provide governments, like Cyprus, with valuable data needed to assess if and where targeted limits would be justified.

Data-Driven Decisions Are Essential for Cyprus

While residential property prices in Cyprus rose 7.5% in Q1 2026, driven largely by foreign buyers, strong domestic demand, and increased construction costs, authorities have yet to officially link this rise to short-term rental activity.

To justify local regulations on short-let properties, Cyprus will need detailed, neighborhood-level insights covering listings, professional hosting activity, rental rates, housing prices, and overall supply trends. Only a data-backed approach will allow effective balancing of rental market demands with housing affordability.

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