A red alert has been triggered within both the government and Parliament following a revealing report by Brief regarding the alarming dimensions of the ongoing foreclosure process, particularly concerning primary residences. This wave of foreclosures risks causing an uncontrollable social crisis.

>>Foreclosure Tsunami in Cyprus: 2,500 Notices Threaten Mass Evictions of Main Homes<<

Thousands of primary residences are under threat of foreclosure or repossession by credit acquisition companies, with traditional financial institutions playing a lesser role, over the coming months.

According to Brief, the issue has not gone unnoticed by the Presidential Palace.

In the House of Representatives, members are preparing draft laws — not to overturn the existing legal framework already approved by Parliament, which was required by international institutions as part of an economic program to rescue the banking system from the burden of non-performing loans (NPLs) — but to develop parallel protection schemes.

A member of a parliamentary group told Brief: “The aim of these draft laws is to design an additional protection scheme for primary residences so that more borrowers with a secured first home can be covered.”

This member also expressed the opinion that the state should expand the powers of the Financial Ombudsman, a matter which would require a legal opinion from the Law Office.

Yesterday alone, roughly 100 primary residence foreclosures took place. According to Brief’s report, by December an estimated 2,500 foreclosure notices will be issued, covering primary homes, apartments, plots of land, farmland, and commercial properties.

Of these 2,500 notices, approximately 1,100 relate to primary residences and apartments.

One striking example of the seriousness of the situation is that yesterday a specific credit acquisition company conducted about 100 first-home foreclosures. However, results fell short of expectations, as there was no significant response from interested buyers. It was leaked that none of these foreclosures were actually completed.

Nevertheless, under current legislation, these properties will automatically transfer to the ownership of the credit acquisition company six months from now.

There has also been a dramatic rise in requests to suspend auctions through the Financial Ombudsman’s Office.

In the first half of 2025 alone, 121 applications for suspension of foreclosures were submitted, of which 116 concerned primary residences.

By comparison, there had been 110 such applications for all of 2024.

Of these 116 first-home suspension requests in 2025, the Ombudsman managed to secure suspension for 46 cases.

In 30 cases, the credit acquisition companies rejected the suspension requests, while the remaining 40 applications are still pending.

According to official data, there are also additional first-home foreclosures currently in the “iota” procedural stage, one step before moving to the “iota(a)” stage — the final phase before auction or repossession by the credit acquisition company.

Market actors, political figures, and banking system insiders all agree that borrowers who took loans from depositors’ funds have an obligation to repay them.

Most of the loans that turned non-performing were issued before 2013, and some even carry court decisions.

Efforts to protect primary residences for the majority of affected households will not be easy. Experts emphasize it would be disastrous to return to pre-crisis practices, but equally catastrophic would be a mass wave of first-home auctions.

They argue that three institutions must cooperate to find solutions and avert a potentially unprecedented social crisis: the executive branch, the legislature, and the domestic supervisory authority, the Central Bank of Cyprus.

A senior government official stressed: “The state must put ideas on the table, discuss them, assess its financial capacity, and see if it can support households that would otherwise end up homeless.”

He also reminded that Cyprus has one of the highest levels of private debt in Europe, driven primarily by NPLs that, while removed from bank balance sheets, still burden the broader economy.

According to data submitted to Parliament, during the first half of 2024, about 45 primary residences went through the foreclosure process and were auctioned or repossessed.

In the second half, up to December 2024, another 235 first-home foreclosure notices were issued, meaning that within six months, the number of auction notifications for primary homes had increased fivefold — regardless of whether their value was below or above €350,000.