First developer in Larnaca has joined the affordable housing programme in Cyprus

The Cyprus Interior Ministry and Africanos Property Developers recently signed a contract for the construction of the first apartment block in Larnaca under the new housing policy approved by the Cabinet of Ministers in December 2023.

The residential complex will be built in the centre of the coastal town.

Under the terms of the agreement, upon completion of the project, 20% of the apartments will be transferred to KOAG, which will sell them at affordable prices to the needy residents of Cyprus. In return, Africanos Property Developers has been granted the right to build apartments, with the building ratio being increased to 45%. It should be noted that other developers in Cyprus have also shown interest in this scheme. A similar agreement has already been signed with the company CYFIELD, which will build a residential complex in Limassol.

Recall that the main objective of the state initiative - to bring to the property market in Cyprus in the next three years about 800 residential units at affordable prices for ordinary people (both for sale and for rent).

As part of the strategic plan to stimulate the development of affordable housing, the Government of Cyprus has developed an innovative housing policy. It involves the introduction of two new alternatives for the use of the additional building quota, depending on the needs and plans of each interested developer. Incidentally, the housing incentive for the maximum permitted building ratio has been increased:

1. Up to 45% for residential areas with a build-up ratio of more than 1:1;
2. Up to 25% for residential areas with a building ratio of 1:1 or less.

However, these incentives are applied as follows:

1. For properties with a minimum net floor area of 1,000 m2, a maximum allowable build-out ratio of 45%;
2. For properties with a minimum net floor area of 4 thousand m2 - a maximum allowable build-out ratio of 25%.

It should be noted that the use of an increased build-out ratio in a property under construction in accordance with the above conditions also obliges developers to provide housing:

1. 25% of the floor area resulting from the increased building ratio to the beneficiaries of the affordable housing programme, with the remainder to be used at the discretion of the owner (for residential zones with a building ratio greater than 1:1).
2. 15% of the floor area resulting from the increase in the building ratio to the beneficiaries of the affordable housing programme, with the remainder to be used at the discretion of the owner (for residential zones with a building ratio equal to or less than 1:1).

In general, this policy provides more opportunities for the construction of affordable housing and the development of the property market in Cyprus.