Despite the public debate and concern developed by parliamentary parties around the issue of foreclosure of primary residences for non-performing loans, official data reveal a different reality for the composition of properties that are being forced to liquidate.
As recorded in an article – analysis published on the website of the Central Bank, in the section The CBC Blog, entitled "The legislative framework of foreclosures in Cyprus: Financial Stability Mechanism", despite the relative increase in foreclosure foreclosures observed in recent quarters, the percentage of primary residences sold in any way from January 2022 to March 2026 remains limited, corresponding to 6% of the total sales carried out.
In the article, signed by Marianna Christoforou, it is noted that, over time, agricultural land (parcels and other fields) is the main type of property to be sold, corresponding to 61% of all sales, followed by the house/apartment (ready or under construction) with 18% (not all primary residences), a trend that is confirmed until the first quarter of 2026. In relation to the total volume of foreclosures, it is observed that from 2024 it is relatively stable, with slight variations in the composition of the real estate categories.
The analysis, according to the article of the Central Bank, is based on data submitted to the CBC by licensed credit institutions (APIs) and credit acquiring companies (SPCs).
Central Bank of Cyprus data highlights a clear trend, the sending of the first warning letters rarely results in a real auction, as the majority of cases are "filtered" and resolved along the way. In relation to the number of foreclosure notices sent, the data shows that the volume of letters sent or served, although decreased in recent quarters, It remains high, fluctuating between quarters but with no signs of substantial de-escalation.
It is noted that the mandatory separate sending of the Type Notification "I" was introduced with the amendments to the legislation in 2024. The discrepancy between the number of 'I' and 'I' notices, which are the initial stages of the sale process, and the lower number of 'IA' notices, which mark the first auction, shows that a smaller proportion of properties end up at auction.
Much of the cases are either settled by consensus between mortgage lender and debtor, or delayed due to legal action, negotiations, or other procedural factors.
The current legal framework, according to the article, is directly linked to the successful conclusion of the negotiations. For the period between January 2022 and March 2026, the data is impressive:
1. Cumulative settlement rate of 30%: Almost one in three cases (30%) for which the foreclosure process was initiated was resolved through a consensual agreement (restructuring or debt-to-property exchange – DFAS).
2. Active Negotiations at 5%: An additional 5% of the total cases are currently in the discussions between banks and debtors.
3. Economic Impact: The total market value of the mortgaged properties settled consensually reaches a staggering €2.3 billion, highlighting the sheer scale of the restructurings achieved outside the courtrooms.
The Commissioner's "paradox"
One of the most interesting findings of the article concerns the protection mechanism of the Financial Commissioner (XE) for eligible debtors (main residence up to €350,000).
Although this framework entered into force in 2024 and was further strengthened with the 2026 amendment, it has been very limited to date. According to the analysis of the Central Bank, this fact indicates that the problem may be mainly focused on the ability to repay debts and not on disputing the amount of the legally due.
According to the available data, the largest percentage of properties settled through consensual settlement concerns agricultural land (parcels and other fields), which amounts to 42%. This is followed by arrangements for main residence and for house/apartment (ready or under construction) with percentages of 22% and 21% respectively. In recent quarters, there has been an increase in the settlement rate of main residence and house/apartment (ready or under construction).
