Housing is an issue of major importance and a constant priority for the Government, the Minister of Interior, Constantinos Ioannou, has underlined.
Speaking in the context of the presentation, on the topic of 'Integrated Housing Policy: The performance of the measures so far and the next steps,' he stated that the results presented demonstrate the government's commitment to addressing the housing issue in a comprehensive and effective manner, offering realistic and applicable solutions to our fellow citizens who face difficulty in securing decent housing.
"In recent years, housing security has been at the centre of public debate, both in Cyprus and throughout the European Union. The lack of available housing units observed across Europe makes it difficult for citizens to access decent housing, particularly affecting socio-economically vulnerable households," Ioannou said.
He also added that exogenous factors, inflation and geopolitical developments with the conflicts in Ukraine and the Middle East slowed down construction activity, leading to a reduction in the housing stock, and emphasised that low supply, combined with continued high demand, created intense pressures on the market, with rising purchase and rental prices and, by extension, reduced access to affordable housing.
Recognising the magnitude of the problem, the government, since 2023, has proceeded with the implementation of a comprehensive housing policy, based on two pillars:
- the increase in the housing stock, and
- strengthening the purchasing power of citizens.
"Our main priority is the production of new housing units, especially affordable housing, as well as the support of our low- and middle-income citizens, with an emphasis on young families," the Minister of Interior noted.
Warm response to urban planning incentives and Build to Rent
In this context, the government has carried out one of the largest interventions to boost housing supply, leveraging an extremely important asset of the state: the building coefficient. Through the Urban Incentive and Build to Rent Schemes, land development professionals are granted an additional building coefficient of up to 45% of the current one, with the obligation to make part or all of the additional units available at affordable purchase or rental prices, respectively.
The two schemes have already received a warm response from the construction industry, Constantinos Ioannou stressed, explaining that, based on the applications that have been submitted, it is expected that almost 2,000 units will be created within the next two years, of which 260 will strengthen the affordable housing stock. At the same time, through the option to purchase the additional building coefficient, and based on the interest so far, it is estimated that an amount of approximately €11 million will flow into the Cyprus Land Development Corporation's Special Affordable Housing Fund, for use in the implementation of its own programmes, which in turn will provide those concerned with an additional significant number of affordable housing units.
"Knowing that the two schemes will yield tangible results within a two-year horizon, we have also adopted the Cyprus Scientific and Technical Chamber's recommendation for immediate utilisation of the existing idle housing stock," he added, noting that through the 'Renovate-Rent' Scheme, owners of empty and idle homes in municipal areas can receive a grant of €15,000 to €35,000 for their renovation and upgrading, with the obligation to make the home available to beneficiaries of affordable rent for a period of four years.
Despite the high level of sponsorship, interest in this specific Scheme remains lower than expected. To date, 63 applications have been submitted, of which 34 were approved, 11 were rejected and another 18 are still under consideration. After communicating with those who had expressed a preliminary interest in participating in the Scheme, the government authorities recorded the difficulties and, in collaboration with Cyprus Scientific and Technical Chamber, are immediately proceeding with improvements to make the Scheme more attractive, as the state believes that its practical implementation will directly contribute to increasing the available stock.
Activate CLDC
At the same time, since assuming the governance of the country, the political decision was taken to reactivate the Cyprus Land Development Corporation (CLDC) and transform it into a horizontal body implementing the government's housing policy. Through various actions, the Corporation, which had remained essentially inactive for the previous three years, acquired an upgraded role, executive responsibilities and sources of funding. Specifically, the Minister mentioned the concession by the state of €16 million for the first phase of the Affordable Housing Scheme in Ayios Nicholaos in Limassol, and the additional financial assistance of €12 million for the production of 54 units in Strovolos.
As a result, development projects were launched earlier than initially planned. Construction of 181 housing units began in Nicosia and Limassol in 2025, and construction of another 258 units is expected to begin in 2026. The acceleration of CLDC development projects substantially strengthens the affordable housing market, providing additional options to the Corporation's beneficiaries.
Strengthening the purchasing power of citizens
In parallel with actions to increase supply, the government is implementing measures that enhance the ability of citizens to meet their housing needs.
In particular, the Housing Schemes for the Revitalization of Mountainous, Near the Buffer Zone and Disadvantaged Areas and Rural Areas continue, which provide for the granting of financial assistance ranging from €20,000 to €95,000 depending on the area of application, the income situation and the composition of the applicant's family. Since their implementation, the Schemes have supported 1,957 beneficiaries, with a total expenditure of €74.2 million. Following their significant revision last year, we are now working on new improvements, with the aim of including more beneficiaries. More details on the changes will be presented at a later stage, Ioannou noted.
Additionally, given the government's political will to support young people and families, especially low- and middle-income households, the Housing Scheme was implemented to provide financial assistance to 400 cases of young families or young people under the age of 41. The amount of financial assistance ranges from €20,000 to €50,000, according to income criteria and family composition, for the acquisition of a privately owned home in urban areas. Our aim was to strengthen the purchasing power of the beneficiaries, without, however, creating an increase in demand and, by extension, greater pressure on purchase and rental prices.
The Scheme was completed a few days ago and a total of 1,033 applications were received, of which 295 have already been approved and the beneficiaries will be informed in the coming period.
"At the same time, we are focusing on supporting the refugee community to ensure decent housing, until the Cyprus problem is resolved and our properties are recovered. To this end, the Housing Schemes of the Welfare and Rehabilitation Service for Displaced Persons are being implemented, which provide for the granting of financial assistance from €20,000 to €40,000 to displaced persons and victims, based on their income and family situation. As of this year, the Welfare Service Schemes are being implemented in a revised and simplified manner, with increased income criteria and expanded categories of beneficiaries. For the year 2024 and until September of this year, a total of 3,677 applications have been approved, with a total expenditure of €82.5 million," Ioannou emphasised.
Licensing sector reform
It is already known, the Minister of Interior said, that the current government is oriented towards reform and promotes the modernisation of the state through cuts and radical changes in procedures, aiming primarily to serve citizens.
The effectiveness of housing policy is directly linked to the modernisation of the permit issuance process. The Interior Minister said it was a fact that for decades, permitting was a time-consuming, inflexible and complicated process, which caused major delays and hindered the development process. It is characteristic that in many cases, the time to obtain the necessary permits exceeded 15 months, resulting in the inconvenience of surveyors, entrepreneurs in the construction industry and, above all, citizens.
By simplifying and digitising the procedures, the foundations were laid for a significant reduction in the time required for granting permits for low and medium-risk developments, which constitute approximately 50% of applications. “Specifically, we have managed to shorten the time required to examine urban planning and construction applications to a total of 40 working days for single-family and duplex houses and 80 working days for multi-family buildings with up to 20 apartments. Already, more than 1,500 applications for single-family and duplex houses have been examined using the fast-track procedure within the 40-day time limit and more than 260 applications for multi-family buildings with up to 20 apartments have been examined within the 80-day limit. This allows more than 3,500 families to meet their housing needs approximately one and a half years earlier compared to the previous licensing practice,” Ioannou pointed out.
Construction Scheme for Collective Housing Units
A new housing plan was also announced, which falls within the Government's broader strategy to support the industry, tourism and trade sectors. "The difficulty of finding accommodation for workers in many cases constitutes an obstacle to their job search in these sectors, which does not allow for the smooth operation of businesses. At the same time, the reservation of housing for seasonal staff exacerbates the housing problem in areas that are already facing increased pressure. At the same time, we all often witness incidents where workers from third countries are staying in units that are unsuitable in terms of hygiene and safety," the Minister of the Interior said, among other things.
The Housing Scheme for the Construction of Collective Accommodation Units provides the opportunity to create housing solutions for personnel employed in these sectors. This is a Scheme that was formulated after consultation and with the assistance of interested professional sectors and which is expected to have multiple social and economic benefits, since it aims to meet the short- and medium-term accommodation needs of these workers, especially seasonal workers.
The Scheme allows for the construction of specialised types of housing units, adapted to the needs and conditions of this group of workers, while ensuring their dignified living conditions. Among other things, the main parameters of the Scheme concern the reduced area for all types of units, reduced parking spaces and reduced common areas. For example, in residential developments, a three-bedroom apartment of approximately 80 square meters accommodates six people, while in collective housing, the same square meters will accommodate up to 12 people. As for parking spaces, the Scheme for the Construction of Collective Housing Units provides for one parking space per 24 people, provided that they are served by public transport.
The Scheme may be applied for the construction of collective accommodation units in existing or new residential units, mixed, commercial and tourist developments or in other developments under specific conditions and in very specific areas, which are specified in the relevant Order. The new Order with all the information will be published within the days, with immediate effect.
This specific Scheme has a dual objective. In addition to strengthening the smooth operation of the productive sectors, the Scheme for the Construction of Collective Accommodation Units will contribute to the reintegration of units that are currently occupied into the labor market, gradually ensuring the balance between supply and demand and thus leading to a decompression of purchase and rental prices.
(Source: InBusinessNews)
