Cyprus housing supply outpaces local affordability as minister forecasts economic growth

Nicosia, Cyprus. Ask Wire founder and CEO Pavlos Loizou has warned that Cyprus faces an increasing mismatch between new housing developments and residents’ purchasing power, with rising building permits potentially adding market pressure in 2027 and 2028. Separately, Finance Minister Makis Keravnos said the economy should expand next year despite challenges arising from crises overseas.

Housing construction and affordability diverge

Appearing on the latest Property Talk by Bazaraki episode, Loizou said sustained residential construction, especially in coastal cities, did not necessarily deliver the housing needed by people living in Cyprus.

He said developers were increasingly focusing on foreign purchasers whose buying power exceeded that of local residents. At the same time, rising construction costs and comparatively limited wage increases were putting homeownership further beyond the reach of many Cypriots.

Loizou said there was no contradiction between an expanding number of residential developments and declining affordability: construction could increase while local buyers remained unable to purchase those homes.

Budget forecasts growth despite external pressures

Keravnos presented the 2027 state budget to parliament on Monday, saying Cyprus was expected to record economic growth next year despite headwinds linked to continuing international crises.

He put average projected GDP growth for 2027-2029 at approximately 3 per cent. Inflation was forecast to ease to 2.5 per cent next year, compared with an overall rate of 4.6 per cent for 2026.

The minister said the general government would record another surplus in 2027, amounting to roughly 3.9 per cent of GDP. Public debt relative to GDP was also expected to decline further next year.

Addressing reporters following his budget presentation, Keravnos described the external environment as particularly unfavourable because of intensifying armed conflicts, citing the wars in Ukraine and the Persian Gulf.