While Cyprus hasn’t reached the level of protests seen in Barcelona, the rapid increase in short-term rental properties on platforms like Airbnb and Booking.com is creating significant challenges for the local hotel industry and rental markets.
This trend is seen by some as a natural evolution of the tourism sector, but others warn of its disruptive potential and call for urgent regulatory action.
In cities like Barcelona, Palma de Mallorca, and some Greek islands, anti-tourism activists have protested against the surge in Airbnb rentals, arguing that these are driving up housing costs and pricing residents out of city centers.
Chrisemily Psilogeni, General Director of the Association of Cyprus Tourist Enterprises (Stek), noted that while the situation in Cyprus isn’t as severe, there is a clear disparity between regulated hotels and the largely unregulated short-term rental market.
“The number of self-catering accommodations now exceeds a third of the beds available in hotels and other tourist accommodations,” Psilogeni told the Cyprus Mail.
Out of 14,446 short-term rental properties in Cyprus, only 7,200 are officially registered and legally allowed to host guests as of June 2024, Psilogeni explained. This means that more than half of these guesthouses are operating illegally, creating unfair competition and driving up rental prices.
The impact of short-term rentals extends beyond the hotel industry, affecting local residents, students, and low-income families. Psilogeni pointed out that the proliferation of short-term rentals has significantly contributed to increased rents and the cost of living, making affordable housing scarce.
“In several areas, especially those with high tourist traffic, finding accommodation has become a major issue,” she said.
Students across the island echo these concerns, particularly during the summer months when finding affordable housing becomes increasingly difficult. Giorgos, set to start his bachelor’s degree at Tepak in Limassol, described his struggles: “I never expected such high prices. Studio apartments are over €1,000 per month. Despite saving money from summer jobs for the past five years, I still need my parents’ help to get by.”
Despite these concerns, some stakeholders argue that short-term rentals represent the future of the industry. An official from the Ayia Napa municipality suggested embracing the trend rather than combating it.
“Saying that half of the properties on offer as short-term rentals are unlicensed is incorrect,” the official told the Sunday Mail. “Around 11,000 out of the 14,000 short-term rental properties on the market have applied for official registration. This shows that the market is moving towards regulation.”
Yiannis Kotzias, General Manager of Operations at Phaedrus Living, defended short-term rentals, highlighting their benefits: “Short-term rentals create jobs, generate revenue for the state, attract international investors, and provide local investors with a safe and profitable investment option.”
Kotzias dismissed claims that short-term rentals are responsible for rising rental prices. “Market conditions, such as limited housing stock, soaring property prices in specific areas, and rising costs, have driven many to rent,” he explained.
However, not everyone is convinced. The Cyprus Real Estate Agents Registration Council has called for a ban on short-term property rentals to help lower rental prices. Marinos Kineyirou, head of the council, stated that this phenomenon is significantly responsible for the skyrocketing rental prices and reducing the supply of long-term rental properties.
Kineyirou referenced Barcelona’s decision to prohibit short-term rentals from 2029 as a model for Cyprus to consider. Psilogeni, while not advocating for such drastic measures, emphasized the need for effective regulation.
“We’re not suggesting a total ban, but there are growing issues that need urgent attention before they become too big to solve,” she said.
Stek recommends several measures to regulate the short-term rental market, such as limiting rentals to a specific period not exceeding 90 days per year, especially in city centers where housing shortages are most acute. Psilogeni also suggested implementing an overnight stay fee and adopting health and safety regulations for short-term rentals.
“Collecting statistics from these platforms is crucial to have an accurate picture of tourist overnight stays on the island and to verify correct income declaration to the tax department,” she said.
Another proposed measure is to require building management committee approval before an apartment can be rented out on a short-term basis, ensuring residents’ interests are considered and the integrity of residential areas is maintained.
The debate over short-term rentals in Cyprus reflects a global trend. Cities with high tourist traffic, such as Paris, London, Reykjavik, and Amsterdam, have introduced strict regulations to balance residents’ interests and the tourism industry.
As Cyprus navigates this ongoing issue, stakeholders agree that a balanced approach is necessary.
“The goal should be to protect the quality of the country’s tourism product while ensuring that local residents can find affordable housing,” Psilogeni said. “With effective regulation and cooperation between the government, the tourism industry, and short-term rental platforms, we can achieve a solution that benefits everyone.”
source: cyprus-mail.com
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