Middle-income households in Cyprus are facing a deepening crisis as foreclosure rates for primary residences valued under €350,000 have seen an unprecedented spike. Confidential data from the Central Bank of Cyprus (CBC), recently submitted to the House of Representatives, reveals that the vast majority of homes now being liquidated at auction fall within this “affordable” price bracket.
The surge follows the 2024 lifting of a longstanding moratorium that previously shielded first homes from repossession. According to the report, the third quarter of 2025 marked a significant turning point, with 93 out of 98 total primary residence auctions involving properties valued below the €350,000 threshold.
Auction Outcomes: Lenders Take the Lead
The data highlights a concerning trend: the majority of these properties are not being sold to the public but are instead being absorbed by the banks themselves.
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Bank Acquisitions: Of the 93 lower-value homes auctioned in Q3 2025, 77 were acquired by mortgage lenders after failing to attract third-party buyers during the initial six-month auction window.
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Third-Party Sales: Only 16 homes in this category were successfully sold to private individuals or investors during the same period.
By comparison, only five primary residences were sold at auction during the third quarter of 2024, representing an annual increase of more than 1,700% in successfully executed foreclosures for first homes.
The “Pipeline” of Displaced Families
The crisis appears set to worsen, with more than 900 primary residences currently moving through various stages of the foreclosure pipeline. The CBC report detailed the volume of legal notices issued during the July–September 2025 quarter:
| Notice Type | Properties <€350k | Properties >€350k | Legal Significance |
| Type IA | 174 | 34 | Final notice: sets date, time, and place of auction. |
| Type I | 388 | 32 | Intent to sell: grants a 45-day final repayment window. |
| Type Theta | 167 | 15 | Arrears notice: triggers initial foreclosure after 120 days. |
In total, 731 borrowers with homes valued below €350,000 received some form of foreclosure notification during the quarter, indicating a massive wave of upcoming sales in 2026.
Political Friction and the Inactive “Special Court”
The sharp rise in repossessions has reignited a political firestorm in Nicosia. Despite the passage of legislation in late 2023 intended to create a specialized court jurisdiction for foreclosure disputes, the system remains non-operational. This leaves borrowers with few options other than non-binding appeals to the Financial Ombudsman.
With parliamentary elections on the horizon, the House Finance Committee is scheduled to meet on March 9, 2026, to discuss a potential “emergency freeze” on foreclosures. However, as the latest data shows, the momentum of bank-led repossessions is currently outpacing the legislative response.
Source: Property News Cyprus