Cypriot MPs Demand Stronger Protection for Homeowners Against Foreclosures

Members of the Cypriot Parliament intend to push for additional protection measures for homeowners facing property seizure due to debts. Among the proposals is a complete suspension of foreclosure procedures throughout the entire year of 2026.

The discussion of approximately 30 legislative initiatives will begin on March 9 at a meeting of the Parliamentary Finance Committee. The Minister of Finance and the Governor of the Central Bank have been summoned to the hearing. Parliament aims to finalize the work on this issue by mid-April—after which the legislative body will be dissolved ahead of the May elections.

AKEL representative Aristos Damianou stated that a "pogrom" of foreclosures is taking place in Cyprus, resulting in "thousands" of people losing their homes. According to him, the current system fails to provide adequate protection for either homeowners or loan guarantors, and many cases are already at an advanced stage and not subject to review.

Green Party MP Stavros Papadouris cited data showing that the majority of cases involve citizens' primary residences. Specifically, 55% of foreclosures apply to homes valued up to €250,000, and 70% up to €350,000. It is the €350,000 mark that Parliament previously considered as a kind of protective threshold.

Of particular concern are so-called "terminated loans," where the contract is cancelled due to arrears. In such cases, high default interest rates—ranging from 9% to 12% per annum—are applied, further increasing the debt. Despite credit management companies reducing the volume of "bad" loans by approximately €5.7 billion, their total portfolio grew from €16 billion to €18.5 billion, precisely due to accrued interest.

MPs also pointed to protracted legal processes. Proceedings can last for years, whereas property auctions take place just 6–9 months after the procedure is initiated. Even if a borrower wins the case, it is impossible to recover the house—only monetary compensation is provided.

The DIPA party proposed a temporary ban on the foreclosure of properties valued up to €350,000 for the duration of 2026. Additionally, it is proposed to make the Financial Ombudsman's decisions mandatory and final if the disputed amount does not exceed €50,000.

According to MP Marios Garoyian, homes are often put up for sale over relatively small amounts—€5,000, €10,000, or €20,000—even if the borrower has made attempts to settle the debt.

Deputies warn that if serious changes are not adopted, Cyprus could face an unprecedented wave of home foreclosures as early as 2026.