Cyprus’ short-term rental market is expanding, stakeholders say, pointing to a growing trend of buying residential units specifically to let them via Airbnb. In practice, the sharp rise in tourist arrivals was not matched by a similar increase in hotel capacity, but by additional beds supplied through short-term rentals.
The latest Eurostat data show Cyprus recorded the second highest increase in overnight stays in Cypriot accommodation booked via three online platforms that share data (Airbnb, Booking and Expedia). Politis asked market players to describe what is happening and how the residential property market is being affected.
As they note, there is heightened interest in purchasing residential property both for owner-occupation and for rental, mainly among local investors.
Two types of buyers
Andreas Christoforidis, CEO of Landbank Analytics Group, told Politis that there are two categories of property buyers linked to short-term rentals.
First, strategic investors buying residential buildings to market them through Airbnb in city centres, mainly in Nicosia, Limassol and Larnaca. Second, private individuals purchasing individual units with the same intention, to rent them out via Airbnb.
“The choice by individuals and investors to offer their housing units through short-term rentals reduces the conventional stock of long-term rentals, resulting in upward pressure on rents,” he stressed.
Eurostat data released on Friday also show rent increases over the past decade. In the third quarter of 2025 compared with the third quarter of 2015, rents rose across all 27 EU countries. The largest increase was recorded in Hungary (+107%), followed by Lithuania (+85%), Slovenia (+76%), Poland (+75%) and Ireland (+74%).
Tourism and housing now collide
“Cyprus has undergone a deep structural shift in the relationship between tourism and housing,” Ask Wire CEO Pavlos Loizou told Politis.
“Over the past decade, annual tourist arrivals rose from about 2.4 million to around 4 million, an expansion that should have required roughly 37,000 additional tourist beds. However, despite sector growth and the island’s heavy reliance on tourism, Cyprus’ hotel capacity changed only marginally, with just 3,000 to 4,000 hotel beds added. The gap, more than 33,000 beds, was covered almost entirely by short-term rentals, which absorbed roughly 16,000 apartments, providing 32,000 to 48,000 beds depending on configuration,” he said.
“This substitution was fast, unplanned and transformative. In effect, Cyprus addressed a tourism capacity issue by reallocating housing stock, particularly smaller urban units, into the visitor economy. The result is that the tourism boom is no longer simply a tourism story, it is now a housing market story,” he added.
Loizou also underlined that short-term rentals do not draw evenly from the housing stock.
“They disproportionately absorb one to two bedroom apartments in central areas and coastal cities, precisely the types of homes sought by a growing population of foreign professionals, essential workers, students and young Cypriots who have been priced out of ownership. This concentration intensifies pressure on entry-level rentals, reduces availability and inflates rents for units that were already in limited supply,” he said.
According to Loizou, Cyprus cannot rely indefinitely on housing stock to carry the weight of tourism. Without a coherent strategy to expand hotels, regulate short-term rentals and plan urban development, he warned, tensions between tourism and housing will worsen.
“Cyprus solved a tourism problem, but it created, or at least magnified, a housing problem. Aligning the two is now essential for a balanced and sustainable property market,” he stressed.
Cyprus near the top in the EU
According to Eurostat, between July and September 2025, 398.1 million overnight stays were recorded in short-term rental accommodation across the EU, booked via Airbnb, Booking or Expedia. The total number of guest nights in the third quarter of 2025 increased by 8.7% compared with the same period in 2024 and by 28.2% compared with the third quarter of 2023. In the second quarter of 2025, the annual increase across the EU reached 17.8%.
While the EU as a whole recorded a slower annual increase in overnight stays in the third quarter of 2025, growth rates varied widely among member states. Malta recorded the sharpest rise at 24.0%, followed by Cyprus at 19.4%, Sweden at 13.1% and Greece at 12.3%. In Cyprus, the annual increase in the second quarter of 2025 stood at 29%.
Double-digit increases were also recorded in Latvia (12.3%), Germany (12.0%), Denmark (11.6%), Slovenia (11.3%), Ireland (10.7%), Finland (10.4%) and Czechia (10.2%).