Cyprus Mortgage Market: Credit is Rising, but the Real Issue Lies Elsewhere
The Central Bank of Cyprus data for May paints a picture of a booming credit market. Total loans in the banking system have crossed the €28 billion threshold, showing a year-on-year growth of over 12%—the fastest pace in years. New mortgages also surged, jumping from approximately €106 million in April to around €145 million in May, a sharp increase of nearly 40% in just one month.
On the surface, such figures might raise red flags. However, a closer look reveals a market that is actually very far from a credit bubble.
Why the Cyprus Property Market is Safe from a Credit Bubble
The total outstanding mortgage debt of households stands at nearly €9 billion—and has barely budged over the last four years. The impressive growth in total credit is primarily driven by other sectors, not by an inflating housing debt.
Furthermore, foreign exposure is negligible:
98% of h