The Cypriot authorities have announced a new, large-scale affordable housing project in the Strovolos municipality in Nicosia. The Cyprus Land Development Corporation (KOAG) is implementing the initiative with the support of the Ministry of the Interior, which will allocate €12 million for land acquisition and construction. According to government sources, Interior Minister Constantinos Ioannou is preparing a proposal on the distribution of funding for consideration by the Council of Ministers.
The new residential complex will comprise two modern buildings
The project involves the construction of two modern residential buildings on a single plot in Strovolos. The first five-storey building will comprise thirty two-bedroom apartments, and the second four-storey building will have twenty-four similar apartments. Construction is scheduled to begin at the end of 2025 and be completed within three years. Funding will be provided in stages: €4 million will be allocated in 2025, followed by €8 million in 2026.
The Ministry of Internal Affairs already has a successful track record of cooperation with KOAG. Last year, the corporation received €16 million for the construction of 138 apartments in Limassol. Another similar project is now being promoted in the Agios Ioannis district of this Cypriot city, where the municipality will provide land for the construction of affordable housing. Once both Limassol projects are complete, approximately 600 new apartments will have been built at a total cost exceeding €100 million.
Why is affordable housing important for Cyprus?
KOAG experienced serious financial difficulties after the Cyprus investment programme closed. This programme generated significant revenues by granting citizenship to investors. However, thanks to a new government strategy, the corporation is now receiving stable funding through programmes run by the Ministry of the Interior. Additional funds are coming from compensation payments under various housing construction plans.
An important advantage of the new housing will be reduced rental rates — 25–30% below market rates. This is particularly pertinent given the increase in rental prices in Nicosia and Limassol, which has been driven by an influx of foreign professionals and students, as well as an increased demand for long-term rentals. Experts predict that KOAG projects will stabilise the housing market and make rentals more affordable for young families and public sector employees.
Programme prospects
The Cypriot government plans to expand the programme to other municipalities, including Larnaca and Paphos, where there is also an acute shortage of affordable housing. Options are already being considered for allocating state-owned land for similar projects, as well as the possibility of attracting private investors through public–private partnerships.
These new initiatives by the Ministry of the Interior will help thousands of Cypriot residents to find affordable housing and will stimulate the construction sector by creating new jobs and contributing to economic growth.