Housing loans are a critical issue for young couples in Cyprus. The necessity for housing drives many to seek loans during a period of high property prices and stagnant wages. The government has recognised these challenges and implemented a new housing policy with programs worth €77 million, including housing subsidies, renovation and rental plans, enhancement of existing urban incentives, construction of affordable housing units, and allocation of plots in rural areas for low-income families. Buying a home is a significant milestone in any person's life. For young couples embarking on this journey together, it can be an exciting yet challenging experience.
Despite these initiatives, young couples still face difficulties in securing financing. The housing policy aims to offer practical solutions, yet the main difficulty remains: obtaining necessary funds. The average gross monthly salary is approximately €2,200 for men and €1,800 for women, totaling around €3,000 for a household of 25-35-year-olds. With current market conditions, a small house in costs at least €350000. To purchase such a home, a young couple needs a 30% down payment (€90,000) and a €210,000 loan. With a 5% interest rate and a 25-year repayment period, the monthly loan instalment is about €1,230 consuming more than one-third of their total income. If they were to borrow the entire amount, the monthly instalment would rise to €1750. This amount does not include living costs such as electricity, food, water, and other essential expenses, and at the same time makes the ability to start a family even more difficult.
Many young couples in Cyprus are opting for smaller, more affordable homes , typically 2 bedroom apartments, to navigate the challenging housing market and the low starting wages. With property prices increasing faster than wages, couples choose manageable loan amounts to ensure financial stability and minimise their risk. Many couples choose to live in 2 bedroom apartments and try to make the most out of it. Choosing smaller homes allows them to make lower down payments and secure loans with more lower monthly instalments, aligning better with their incomes. However, this strategy has a drawback: as families grow, moving to a larger home can become difficult. The limited initial investment in a smaller property can restrict their ability to upgrade in the future, potentially leading to a compromise on family size or living space, thus affecting long-term housing satisfaction or family planning.
Young couples in Cyprus face significant hurdles in securing housing loans. Understanding the dynamics of income, costs, and available support can help them make informed decisions. If couples are uncertain about their financial ability to buy and support a household, it is wiser to continue renting until they are ready. Purchasing a house is often the largest financial decision one will make and should be treated with careful consideration.
