Cyprus’s property market is facing a challenge, according to the Cyprus Real Estate Agents Registration Council (CREARC). They argue that the current Rent Control Law, implemented in 1983, discourages investment in rental properties.
The law limits rent increases for existing tenants, making it difficult for landlords to keep pace with rising property costs and see a return on their investment.
“Rent control has evolved into a cumbersome obstacle,” said Marinos Kineyirou, president of CREARC. “It traps property owners and stifles opportunities in the market.”
CREARC argues that the current legislation disincentivizes the building of new rental properties. Landlords are hesitant to invest in new developments when potential returns are restricted by rent control. This, in turn, limits the overall availability of rental properties, potentially driving up rents in the uncontrolled sector.
The council is proposing a review of the current legislation to find a better balance. They believe it’s possible to create a system that protects tenants while also encouraging investment in the rental market. This could involve introducing exemptions for new builds or allowing for rent adjustments based on property improvements.
Debate around rent control is not new. While it protects tenants from sudden rent spikes, it can also discourage investment in the rental market, leading to a shortage of available properties. Cyprus is looking to find a way to achieve a balance between these two competing interests.
