The interior ministry unveiled a comprehensive update to the government’s housing policy on Wednesday including a new plan to construct student accommodation and revisions to existing schemes aimed at increasing affordable housing.

Interior minister Constantinos Ioannou said the government is introducing the plan to address the shortage of rooms for students near higher education institutions.

“Student accommodation units will consist of a maximum of ten rooms per unit,” he said.

A five-room unit can be built in 77 square metres of usable space and moreover units may be integrated into new or existing developments within one kilometre of registered universities.

Parking requirements have been further relaxed to one space for every five rooms.

Grants per unit will rise by €5,000, non-residential spaces may now be converted for housing, and electricity limits for tenants have been raised from 200 to 500 kilowatt hours per year.

Income thresholds for applicants have been increased, while displaced families may receive an additional 20 per cent in financial assistance, with total state support potentially reaching €100,000 by combining schemes with the energy ministry.

The Cyprus land development organisation (Koag) has been reactivated with €28 million in state funding, aiming to deliver 244 affordable units for sale and 192 for rent within the year, alongside over 2,500 new units.

A further 22 applications will provide additional units through €11.5 million in contributions to Koag’s affordable housing fund.

Simplification of the licensing process intends to accelerate housing supply, allowing over 5,500 units to enter construction a year earlier than planned.

The reforms come amid persistent concerns from students and MPs about high rents near public universities, particularly at the technological university in Limassol, (Tepak), where monthly rents of €800 to €1,000 have forced many to commute long distances or choose private institutions.

George Karoullas, Disy MP, and Chrysanthos Savvidis, education committee chairman, said expanding student accommodation was urgent to align housing availability with the growth of public universities.

Ioannou emphasised that the government’s housing strategy is targeted towards young people, families, and low to middle-income earners, while supporting sustainable development.

Applications for the new student accommodation and revised housing schemes open on March 2 and will remain open until December 31, 2027.