Schemes aim to balance housing demand and supply

The response so far to the affordable housing schemes has been encouraging, according to Interior Minister Constantinos Ioannou.

He also said that the Cyprus Land Development Corporation (Koag) is planning in the coming years to build and release to the market new affordable housing units for sale and rental.

Regarding the housing grant scheme for young couples and young people up to 41 years of age, which includes the first call in 2024 and second call in 2025, a total of 525 applications were submitted.

Out of these, 152 applications were approved, corresponding to financial support of around €5.4 million.

Another 200 applications are still under evaluation, 172 were rejected, and one was withdrawn.

As for the Renovate-to-Rent scheme, encompassing the first calls in both 2024 and 2025, there were 43 applications submitted.

Of these, 28 were positively evaluated, with financial support totalling around €727,000. Six applications remain under evaluation, while nine were rejected.

Moreover, Cypriot daily Politis reported that the minister responded to a question from Limassol MP Marina Nicolaou on the comparative results on the supply and demand of housing units produced under the unified housing policy schemes.

In his response, the minister stated that the objective is to achieve a medium-term balance between supply and demand.

He added that this should lead to a reduction in both the cost of home ownership and rental prices.

“To this end,” he said, “special emphasis is placed within the housing policy on schemes aimed at increasing the supply of available housing units on the market, in order to meet growing demand and gradually reduce pressure on prices.”

He went on to say that these include schemes relating to urban planning incentives, the Build to Rent model, the Renovate-to-Rent Scheme, and Koag’s affordable housing programmes.

The schemes are intended to generate additional supply beyond what the private sector would produce in the absence of such incentives.

Because these schemes take time to yield visible results and market impact, the minister said that it is currently not feasible to draw definitive conclusions regarding their potential effectiveness.

He did, however, express the expectation that they will help meet part of the rising demand in the coming years.

Based on applications received so far, a financial inflow of approximately €5 million is anticipated for the construction of affordable housing, involving applications linked to seven land development companies.

The number of agreements signed between Koag and land development entrepreneurs to leverage the available incentives currently stands at 16. These agreements involve a total of 84 affordable housing units.

Of these, 65 are designated for sale at affordable prices through the exploitation of urban planning incentives, and 19 for affordable rental through the Build to Rent model.

According to Koag’s development programme, in 2023 it completed and released 16 affordable housing units for sale.

In 2024, it began constructing 24 affordable housing units, which are scheduled for completion and delivery by 2025.

Meanwhile, in 2025, Koag has already begun or will soon begin constructing 135 affordable units for sale and 36 for rent.

In 2026, it plans to begin construction of another 96 units for sale and 156 units for rental. In 2027, it will continue implementing these projects for market release.

At the same time, Koag will reassess its planning for the production of additional units based on resource availability and market demand.