The Cyprus government is taking action to ease the housing crisis, according to Interior Minister Konstantinos Ioannou.
He highlighted a 44.4% rise in building permits for residential units in the first half of 2024. This, along with a small drop in construction material costs, is helping to improve the housing market, which had struggled in recent years.
Speaking at a property development conference in Nicosia, Ioannou explained the government’s housing policy, which focuses on increasing the number of homes available and making them more affordable. The plan, called ‘Housing My Future’, aims to lower prices by increasing supply and helping young people and families buy homes.
Although house prices and rents have been rising, the Central Bank of Cyprus reports that the increase is slowing down, suggesting a more balanced market. Ioannou believes that building more homes will further stabilise prices.
To boost construction, the government has introduced urban planning incentives and the “Build to Rent” scheme. These allow developers to build more residential properties in exchange for offering some of them at affordable prices. Specifically, all homes built under “Build to Rent” must be rented at lower rates. Meanwhile, the urban incentives scheme requires 20% of extra residential units to be sold at affordable prices, while 25% can be sold at market rates.
The minister expressed satisfaction that developers are supporting these initiatives. Based on current agreements, over 1,900 new residential units will be built, with nearly 300 added to the affordable housing market. Additionally, the government expects to raise €8.7 million for the Affordable Housing Fund.
However, Ioannou acknowledged past delays in issuing building permits, which worsened when local government reforms transferred responsibility to regional authorities in July 2024. He attributed the issue to the complexity of the changes and inadequate preparation.
To address this, the government has reassigned 24% more staff to building permit application processing and approved 354 new permanent positions for regional offices. As a result, the number of processed applications has increased, but further improvements are needed.
The government is also reforming the approval process for residential developments to reduce bureaucracy and speed up permits for low and medium-risk projects, which make up about half of all applications.
Additionally, the government plans to remove restrictions on apartment types in tourist zones and reduce the minimum apartment size by 15% in designated residential areas. These changes aim to encourage more housing development and make homes more accessible to the public.
