Property rentals in Cyprus have been moulded by significant social and economic factors both locally and overseas. Cypriot culture and economic constraints in the past meant that homes were not built for investment purposes. In general the typical and favoured model for investment by Cypriots was to buy land, or inherit land.
Each district in Cyprus has a particular appeal to a certain type of client, such as Cypriots, tourists, foreign workers, retirees and expatriates.
During the 1980’s and 1990's rental values were relatively low, even though there were very few individual properties available for long term rental or holiday let; mainly because Cypriot families were living in the majority of properties as their homes.
Cyprus does have a long history of catering for tourism successfully at hotels, some holiday resorts and some limited self catering accommodation, for visitors from the UK, Scandinavia, Russia, Europe and Greece.
A massive amount of foreign investment from 2000 to 2009 changed the Cyprus property rental market completely, being the catalyst for a property boom island wide. Many properties became available as villa lets or holiday properties and long term property rentals, consequently rental values soared.
The global economic down turn began effecting the rental property market by 2010; manifesting itself as a reduction in demand and the inevitable reduction of rental income, this continued until late 2014.
2015 saw the volume of property rentals growing steadily in all sectors, with record bookings for hotels, holiday accommodation and long term rentals, despite this rental values held steady and did not increase noticeably.
2016 has the potential to be the year that Cyprus recovers from its recent economic problems and manages to restore its former good reputation as a safe haven and solid location for investments. This is supported by the recovery of the property sales market, the banking sector recovery and Cyprus government initiative to stabilise the Cyprus economy.
This all bodes well for Cyprus rental properties: with increased tourism, visitors and increased foreign invest expected.
2017 delivered its potential and Cyprus is in recovery mode. Demand for rental properties for both long term and short term rental properties was very high. Increases to monthly rental prices were as much as 40% on 2016 prices. However an economic paradox ensued: whereby many properties previously available for rent were withdrawn from the market by the owner. The obvious question is why, when there is such high demand from potential tenants. The answer is simple; those property owners only put their properties on the market for rent during the economic down turn as a stop gap measure. Finally; demand for sale properties is also high and many property owners wish to promote their properties for sale during this economic window of recovery.
2018, the demand for rental properties has increased, whilst the supply of rental properties continues to remain low, this is certain to drive prices up.