The Cypriot government has announced new initiatives aimed at increasing the supply of affordable housing and curbing the rise in property prices in the country.
Speaking at the annual Real Estate and Construction Conference on Thursday 20 March, Interior Minister Constantinos Ioannou outlined the main measures.
Among the most important were
- Reducing the minimum size of apartments by 15% - the move will allow more apartments to be built in the same area, increasing supply and helping to meet rising demand.
- Removing mandatory quotas for housing in tourist areas - this will give developers greater flexibility and help balance the market. This proposal is in the final stages of consideration and will soon be debated in Parliament.
- Introducing the 'build to rent' concept - new mixed-use properties will be built in business parks for long-term rental. This will reduce pressure on the urban housing market and help stabilise prices.
- Urban Planning Incentive Programme - developers will be able to increase additional building quotas from 25% to 45% in exchange for making part of the dwellings available for rent to the poor at affordable prices as part of social measures. According to this principle, several agreements have already been concluded for the construction of 1.9 thousand new residential units, of which 300 units will be social housing.
- State subsidies - from 15,000 to 35,000 euros - will be provided for the renovation of empty houses, provided they are rented out at affordable prices. So far, some 50 applications have been submitted and more than 400 users have registered on the Cyprus Land Development Organisation (CLO) platform. In addition, the government is seeking new sources of funding to expand the programme.
- Reducing the timeframe for issuing building permits - documents for private houses and duplexes are now processed in 20 working days, while permits for large projects are issued in 40 working days.
Ioannou noted that rising property prices, increasing construction costs and demographic changes require active government intervention.
In this regard, the government is developing a land allocation scheme for low and middle-income families, continuing the reform of local authorities responsible for issuing building permits, and speeding up the processing of applications for low and medium-risk properties, which account for almost 50% of all applications.
Ioannou stressed that Cyprus issued 44.4% more building permits in the first half of 2024. Lower prices for building materials have made it easier for developers to operate. Property purchase and rental prices are rising at a slower pace, as confirmed by the Central Bank's data for the third quarter of 2024.
Finally, the minister mentioned that the government intends to expand the Gil for My Future programme as part of its long-term strategy. This project aims to increase the supply of affordable housing for young people and young families.
We are seeing a gradual levelling of the market. However, the work does not stop - the government is introducing new initiatives to ensure that housing remains affordable and comfortable for citizens," concluded Ioannou.