The burgeoning short-term rental market in Cyprus is presenting a formidable challenge to authorities, with a significant proliferation of both officially sanctioned and illicit properties. This rapid expansion, fuelled by escalating demand, has prompted the Deputy Ministry of Tourism to intensify enforcement efforts, while new legislation is being introduced to align with forthcoming European Union regulations. The situation is not merely a matter of regulatory oversight; it is increasingly exacerbating existing housing shortages and placing undue strain on the island's property sector.
In a stark illustration of the sector’s growth, official figures reveal a dramatic upswing in registered short-term rental accommodations. As of April 2023, the island boasted 4,765 registered properties offering 21,636 beds. Fast forward to the present, and these numbers have surged, with approximately 12,000 properties now officially listed, excluding those in rural and agro-tourism categories. This represents a staggering 92% increase in both registered properties and available beds over a two-year period, with the current count standing at 9,153 registered properties accommodating 39,218 individuals. The most popular destinations for these rentals are Paphos, Famagusta, and Larnaca, which collectively account for a substantial portion of the island's short-term lodging capacity.
However, this burgeoning legal market is shadowed by a parallel, unregulated segment. So far in 2025, authorities have received 81 complaints specifically concerning unregistered rental properties. This rise in clandestine operations is a cause for considerable concern, not only for the state, which faces potential revenue losses, but also for legitimate businesses operating within the sector. Tourism officials have articulated the multi-faceted impact, stating, "The rapid rise in illegal rentals isn’t just a revenue issue for the state. It also worsens housing shortages and increases pressure on an already stressed property market." The scarcity of long-term rental options is becoming more acute, driving up prices and making it increasingly difficult for residents to find affordable housing.
In response to these escalating challenges, the Cyprus Parliament has greenlit the 2025 Amendment Law. This legislative move is designed to harmonise domestic regulations with the provisions of EU Regulation 2024/1028, which is set to come into effect on May 20, 2026. The EU regulation aims to introduce greater transparency and order to the short-term rental landscape across member states. The Deputy Ministry of Tourism has been actively engaged in enforcement campaigns, employing a combination of on-site inspections and digital monitoring to identify and bring unregistered properties into compliance. Cases involving demonstrable violations are being referred to the Legal Service for potential prosecution.
Despite these concerted efforts, the regulation of the short-term rental sector remains an intricate and evolving task. The sheer volume of properties, coupled with the inherent fluidity of the market, presents ongoing hurdles. Nevertheless, the introduction of the amended law and the continued commitment to enforcement are anticipated to foster a more equitable and transparent environment. The ultimate objective is to strike a balance that accommodates the demand for short-term stays while safeguarding the interests of the wider community and ensuring the integrity of the tourism industry. The coming years will be critical in determining the success of these measures in taming the "Airbnb chaos" and establishing a sustainable framework for short-term rentals in Cyprus.