Interior Minister Constantinos Ioannou has revealed ambitious figures during a meeting with members of the Parliamentary Committee on Refugees: more than 10,000 new homes and apartments are expected to be built across Cyprus over the next three years. The figure includes both government-backed housing programmes and private developments encouraged through state incentives. The Minister stressed that increasing housing supply is the key to stabilising property prices. According to him, the government's objective is to create a better balance between supply and demand in order to curb further increases in housing costs.
Planning Incentives
The Minister highlighted one of the government's key initiatives—the increase in the permitted building density ratio by up to 45%. Under this scheme, 47 applications have already been submitted, providing for the construction of more than 2,500 residential units. Of these, 400 homes will be offered at affordable prices, which is particularly important for middle- and lower-income households.
Developers who chose not to allocate part of their projects to affordable housing were allowed to pay the monetary equivalent of the additional development rights. As a result, the Cyprus Land Development Corporation (KOAG) has received €17 million in additional funding. The organisation plans to build 441 residential units in 2026 using these funds, with 244 homes designated for affordable sale and 192 intended for affordable rental. KOAG was established in 1980, with its primary mission being the acquisition of land and the construction of housing for low- and middle-income households.
Fast-Track Building Permits
Another major driver of housing growth has been the fast-track permitting programme introduced in August 2025. The reform has dramatically shortened the construction approval process. Instead of taking between 12 and 20 months as it did previously, permits are now issued within just 40 working days for private houses and 80 working days for apartment buildings.
According to the Minister, by May 2026 the programme had already approved projects for 930 apartment buildings and around 3,000 private homes. Given that each apartment building can contain up to 20 units, even a conservative estimate of 10 apartments per building represents approximately 9,300 new apartments. Combined with the 3,000 private houses, this amounts to more than 12,000 residential units approved through the scheme alone. The Minister noted that construction timelines ultimately depend on private developers, but given the high level of demand, building activity is expected to progress rapidly.
The fast-track system has already delivered tangible results. During its initial phase, around 2,100 permits for private homes and 660 permits for small apartment buildings were issued. As a result, more than 5,800 families are expected to obtain housing two to three years earlier than would have been possible under the previous permitting system.
New KOAG Projects
The organisation is currently implementing a number of large-scale housing developments across Cyprus. One of the flagship projects is an affordable rental housing complex in Agios Nikolaos, Limassol, where 138 apartments are under construction. The first residents are expected to move in during 2027. The project became possible thanks to €16 million in government funding, which helped overcome financial difficulties that arose following the termination of the investment citizenship programme.
Around 20 additional housing developments are included in the 2026 budget. These include the ADONIS III residential complex in Polemidia (29 semi-detached houses), as well as projects in Pallouriotissa, Aglantzia, Lakatamia, and other areas. KOAG is also selling completed houses in Kokkinotrimithia, apartments in Larnaca, and other affordable properties.
The organisation's budget for 2026 totals approximately €42 million, with €33.2 million allocated to housing projects. Revenue from property sales is projected to reach €20.9 million.
The government is relying on increased housing supply as its primary strategy for addressing the housing crisis. Planning incentives and fast-track permitting have already begun to deliver results, although the bulk of construction is still ahead. The Minister expressed confidence that these measures will help stabilise housing prices, particularly in the affordable housing segment for middle-income families.