The reduced supply of real estate has been a key factor in the increase in prices in recent years. In this direction, the government, through the KOAG, but also with the cooperation of private land development entrepreneurs, is promoting the affordable housing plan, in order to increase the housing stock and consequently bring about a reduction in prices, as a result of the balancing between supply and demand.
At the same time, a parameter that could provide a solution - to some extent - to strengthen the supply of real estate is the utilization of vacant plots located in the cores of cities. A survey by Ask Wire showed that there are thousands of vacant – idle plots throughout Cyprus.
These, under certain conditions, could be exploited and strengthen the effort to increase supply, channelling a large number of properties into the market. This project, however, has a degree of difficulty, as it involves complex procedures, which require the involvement of the public and private sectors and certainly require the granting of incentives, but also the imposition of taxes.
Under-utilization of land
In particular, for this part of the market, the company Ask Wire carried out a thorough research, which cites numbers, but also suggestions, so that the issue does not remain on paper. The CEO of the company, Pavlos Loizou, spoke to "F", giving several interesting facts.
Specifically, asked whether we can calculate the number of vacant – idle plots, he stressed that "at Ask Wire we work at the plot level, knowing for each property the size, the allowed building factor, if there is a building, its use and its age. Indicatively, in the Acropolis, in Nicosia, we recorded 2,369 plots, with a total area of 1,689,921 sq.m., with 9,240 existing residential units. The data show that only 53% of the permitted building factor is utilized.
In a similar analysis in the central zone of Limassol, the picture is similar. The conclusion is clear: Even in central regions, there is considerable capacity available. The problem is not the lack of land, but its under-utilization."
Supply problem
When asked whether the supply-demand imbalance would be reduced if the specific properties were exploited and entered the market, Mr. Loizou's answer was positive.
He noted: "Cyprus is mainly facing a supply problem. The population increased by 85,000 people in the decade before the 2021 census, with another 75,000–100,000 people added since then (refugees, tech company executives, professionals). But growth is not always directed where there is a real need. A significant portion of the new supply is focused on short-term rentals or products aimed at foreign buyers and higher incomes, limiting the housing available for local use and middle incomes. If the under-utilized land in the cores is activated, the supply for the local market can increase substantially.
Thousands of units
But how many units could be erected on the vacant plots and enter the market? Mr. Loizou states that "in the Acropolis area of Nicosia, the unallocated building factor amounts to 1,017,950 sq.m., which corresponds to ~10,180 additional apartments (average size 100 sq.m.).
In the central zone of Limassol, Papas area, the capacity is estimated at ~8,000 additional apartments. In total, over 18,000 homes from just two areas, i.e. housing more than 45,000 people (2-2.5 people/household).
As it is understood, this is a very substantial intervention on the supply side. At the same time, the existing stock is aging: Of the 52,259 buildings in Limassol, only 806 (1.5%) are under 10 years old, while 20,115 (38%) are over 50 years old. So it is not enough to build new ones, we must also renew the old ones."
Targeted taxation
However, getting these properties on the market is not an easy task. In a recent article in "F", Pavlos Loizou noted, among other things, that the solution can and must be given legislatively.
As he said, "legislation is needed that will introduce substantial occupation taxes on unused urban land, a long-term lease framework that rewards investment in maintenance and co-ownership mechanisms, which will make development legally feasible. Markets respond to incentives. Right now in Cyprus, the motivation is to wait, keep the property and let someone else take care of it. No one is bothered."
Taxation, however, might create some injustices. For example, should a salaried employee who inherited the plot of land, but due to the increase in prices cannot build, should he be taxed? Or, even, if someone does not have any other property and wants to keep the plot as security or transfer it to their children, should they be taxed?
Mr. Loizou underlined that the proposal does not concern small property. It does not concern the primary residence, nor the employee who maintains a plot of land as security or for transfer to his children. The logic is targeted: Burden on the unallocated building coefficient, on properties of significant value, in areas of high demand.
Today there are several incentives for development, but virtually no holding costs. This asymmetry allows land retention without pressure for development. The tax acts as a "push" mechanism: you either develop or make the property available to third parties who can. In practice, a value threshold can be set so that it concerns only significant assets, completely excluding the primary residence and micro-property. The goal is not revenue — it is a tool of land policy.
The course of prices in three phases
Finally, we asked the CEO of Ask Wire for indicative data that shows the course of rents and the role played by Airbnb and foreign workers.
Mr. Loizou pointed out that we have experienced three phases:
-2022–2023: explosive growth, with apartment rents at +18% year-on-year.
-2024: stabilization and local corrections, Limassol even recorded -4.1% in apartments and -4.0% in residences on an annual basis.
-2025–2026: restart more subdued, based on RICS/KPMG for Q4 2025, apartment rents increased 5.79% and apartment sale prices 5.03% year-on-year.
-The key issue is that prices do not reflect quality. In Limassol, much of the stock is old, but it is priced high due to a lack of options.
-Structurally, the market has changed: Some of the inventory has shifted to short-term leases – more than 16,000 units according to a June 2025 study by Ask Wire, while demand from foreign workers focuses on specific zones and property types. The interventions that should be made are clear: Activation of the unallocated rate, incentives for upgrading old buildings, faster permits and a targeted affordable housing policy.
