Cyprus may restrict Airbnb in areas facing housing shortages

Cyprus gains a weapon against Airbnb

Cyprus will be able to restrict Airbnb and other short-term rental services in specific areas if it can prove that they are exacerbating the housing shortage. The European Commission is preparing such a mechanism as part of a new law on affordable housing.

Airbnb

This does not mean a blanket ban on Airbnb across the whole island: first, the authorities will have to identify areas where there is a genuine housing shortage and demonstrate that short-term lettings are a contributing factor.

This is particularly relevant for Cyprus given the rapid growth in tourist rentals. In 2025, Airbnb, Booking and Expedia accounted for 7.64 million guest nights on the island – 24.7 per cent more than the previous year. Between January and March 2026, the figure rose by a further 22.3 per cent, according to the Cyprus Mail.

However, these figures are not sufficient to restrict Airbnb. A guest night indicates how much time people spent in a rented property, not how many flats have been taken off the long-term rental market. Four tourists staying in a flat for three nights account for 12 guest nights. Cyprus will therefore have to find an answer to a much more specific question: are there areas where short-term lettings are taking accommodation away from permanent residents?

The first problems with market regulation are already apparent. According to the Cyprus Audit Office, there are 8,464 licensed self-catering properties listed in the state register. The auditors checked 20 listings on online platforms and found that only six had a valid registration. In Famagusta, out of 150 listings checked, the auditors were unable to find 23 properties in the state registers.

These figures do not allow us to conclude that the majority of short-term rentals in Cyprus are operating illegally: the sample size is too small. However, the state clearly does not have a complete picture of the market. And without it, it will be difficult to prove exactly where Airbnb is creating a problem for long-term rentals.

This is precisely why the European Commission is proposing a targeted approach. If, in a specific area, the authorities can demonstrate that the supply of long-term accommodation is declining, prices are rising, and a significant proportion of properties are being used for short-term lets, that area will be able to be designated a ‘housing stress zone’. Local authorities would then be able to introduce proportionate restrictions on short-term lettings.