Idle land is a significant factor in Cyprus’ ongoing housing crisis, according to Ask Wire CEO Pavlos Loizou. He argues that the issue stems not from a scarcity of land, but from the ineffective use of the land that already exists.
Loizou highlighted that in the Acropolis area of Nicosia, a mere 53 per cent of the permitted building coefficient is being utilised. This coefficient, he explained, indicates the ratio of allowed floor area to plot size, meaning that a substantial amount of permitted space remains undeveloped.
Translating this into figures, there is over 1 million square metres of unused buildable floor area in Nicosia alone, which could potentially accommodate around 10,000 additional apartments. A similar situation exists in Limassol’s Papas area, where Loizou estimates that fully utilising existing planning capacity could yield over 18,000 additional residential units across both urban centres.
This inefficiency, he claims, is central to the housing problem. “The binding constraint is on supply, not demand,” Loizou stated, noting that Cyprus continues to attract both local buyers and foreign investment.
Despite the evident need for more housing, land is often held rather than developed. Loizou pointed out that the median price of urban residential land has risen sharply, with prices jumping from €203 per buildable square metre in early 2021 to €257 by early 2026—an increase of approximately 27 per cent. The increase is even more pronounced in Limassol, where prices soared by 45 per cent, from €245 to €356.
This price surge is not merely a consequence of construction costs or labour expenses; a growing share of the pressure comes from the land component itself, particularly in areas where permitted capacity is not activated. Loizou emphasised that the link between land use and price increases is clear, as areas with high discrepancies between permitted and built capacity see the steepest price rises.
Holding onto land can often be a rational choice for landowners, who benefit from price appreciation without the risks associated with development. However, this behaviour distorts the market, leading to fewer housing units available and faster price rises compared to income levels, making homeownership increasingly difficult for young families and local buyers.
Loizou believes that activating supply is a crucial response to the current crisis. He suggested implementing taxes on persistently idle or underutilised urban land as a way to encourage development. He cited examples from other countries, such as Ireland’s Vacant Site Levy and the UK’s council-tax premiums on long-term empty homes, to illustrate how taxation can incentivise landowners to develop their properties.
Yet, the challenge in Cyprus is not purely economic; it is also political. Those opposing such measures are typically landowners who have a vested interest in maintaining the status quo. This group tends to be more politically engaged and influential, creating a trust deficit among the public regarding new taxes and government spending.
Loizou articulated a clear economic rationale: activating idle land could alleviate pressure on housing prices. However, misaligned incentives hinder progress, as those benefiting from the current system are motivated to maintain it. Consequently, policy measures often revert to demand-side support, which may inadvertently inflate prices further.
For Loizou, a shift in framing is necessary. Instead of general property taxation, the focus should be on taxing inactivity in high-demand urban areas, where unused land incurs a public cost. He stressed that the design of such policies should not target small property owners but rather address persistent underutilisation in strategic locations.
As Cyprus stands at a crossroads, the challenge for politicians is deciding whether to prioritise the needs of society or cater to a privileged few. The data support the need for change; however, the question remains whether policy will adapt accordingly.
