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25 July, 2024
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Rising rent costs challenge Cyprus middle-class budgets

Escalating rents challenge wage growth


A disconcerting trend is unfolding in Cyprus, where not only are the prices of essential goods on the rise, but rents are also skyrocketing, sparking extensive debates and concerns throughout society according to a report on Philenews.

Compounding the issue, wages, particularly in the private sector, have remained stagnant, failing to keep pace with inflation. This puts considerable strain on middle-class households that have no choice but to rent apartments. The escalating costs of food, energy, and rents are weighing heavily on these families, pushing many towards the option of renting due to the prohibitive interest rates associated with home purchases. The situation is further complicated by the fact that prospective homeowners must be capable of financing at least 30% of a property's value.

Data from the Statistical Office reveals that by the end of September, real rents for primary housing had surged by 4.9% on an annual basis, compared to a 3.3% increase the previous year and 2.2% in 2021 compared to 2020. These rent increases are unfolding against the backdrop of an average citizen's monthly wage standing at €1,200, with the lowest gross salary at €885. Roughly 15.4% of employees earn between €1,000 and €1,249, while around 12% receive salaries between €1,250 and €1,499. Just over 10% of employees have gross monthly earnings ranging from €1,500 to €1,749.

Despite earning an average salary, citizens are expected to cover their basic needs, including rent or mortgage payments, and then contend with household bills, which can sometimes reach exorbitant amounts, particularly in the case of electricity costs. Data collection reveals that in some instances, the cost of rent significantly surpasses the average salary in Cyprus.

In the capital, Nicosia, rental prices fluctuate depending on factors such as the apartment's condition and age. For furnished studios in areas like Egomi and Makedonitissa, which are in close proximity to the University of Nicosia and the European University, prices range from €500 to €530. One-bedroom apartment rentals start at €550 and can reach €750 for new units. Second-hand two-bedroom apartments typically begin at €650, with prices varying based on the area, while newly constructed units can reach up to €900. The rent for three-bedroom apartments exceeds €900 and crosses the €1,000 mark for new constructions.

In Larnaca, rentals for two-bedroom apartments range from €550 to €650, depending on the property's age. For new units, prices start at €800 and can go as high as €1,250. The rental cost for three-bedroom apartments spans from €900 to €1,400, once again contingent on the property's age.

As reported by Philenews, in Paphos, renting is becoming increasingly unaffordable for the average worker. Studios are priced between €400 and €500, while one-bedroom rentals range from €550 to €700, depending on the property's condition. A three-bedroom apartment can set tenants back anywhere from €900 to €1,300.

In Limassol, the situation is dire for middle-income workers in search of rental apartments. Foreign companies with highly paid employees have driven rental prices to new heights, with some willing to pay up to €2,000 for a new studio along the seafront. This has caused property prices to soar and created a shortage of available apartments, intensifying the housing crisis.

[With information sourced from Philenews]

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