The Cypriot government has approved an additional €12 million for an affordable housing project in Strovolos, the Interior Ministry said this week.

The scheme, to be carried out by the Cyprus Land Development Corporation (Koag), will see 54 two-bedroom apartments built, with construction due to begin by the end of the year and completed within 24 months. 

The ministry said the decision forms part of a broader housing policy aimed at boosting affordable housing stock and easing pressure on low- and middle-income households. 

A separate Koag project is already under way in Limassol’s Ayios Nikolaos area, backed by €16 million in state funding, which includes 138 apartments for affordable rent.  

This development also forms the first phase of a wider affordable rental scheme carried out in partnership with the municipality, budgeted at more than €22 million. In total, around 600 units are planned across Ayios Nikolaos and Ayios Ioannis at a combined cost of €100 million, with rents set 25 to 30 per cent below market levels. 

According to the ministry, Koag has been given expanded responsibilities under the Christodoulides administration’s housing strategy and is now considered the government’s main implementing arm for such projects.  

Its special affordable housing fund is being replenished through links with other urban planning schemes, including amnesty and incentive plans as well as build-to-rent initiatives. 

Koag’s pipeline extends also beyond Nicosia and Limassol. It has signed agreements with private firms for 84 units, completed 16 homes for sale last year, and has another 24 under construction for delivery in 2025.  

By the end of next year, a further 135 homes are expected to break ground in areas including Pano Polemidia, Ayios Dometios, Lakatamia, Palouriotissa and Kaimakli. 

Its current planning foresees the gradual start of 181 housing units in Nicosia and Limassol in 2025, with another 204 units to follow in 2026, feeding new supply into the market through 2027. 

“The government remains committed to managing the housing problem with targeted and realistic actions,” the ministry concluded.