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Government to unveil new housing policy to respond to rising rents

May 16, 2019 at 2:50pm

The government on Friday will make announcements regarding its new housing policy strategy, philenews reported.

The strategy was presented during a cabinet meeting yesterday by Interior Minister Constantinos Petrides.

The new policy scheme aims to introduce new tools and incentives for the construction of buildings that will be rented or sold at affordable prices.

It also aims to increase the number of houses available in the property market. Experts say that one of the main reasons behind rising property prices is that, currently, demand is exceeding supply.

Also, a number of government subsidies will be introduced for specific population groups.

Construction of houses which will be available at affordable prices

The first part of the strategy includes the construction of new houses that will be offered at affordable prices for students and workers. The rental agreement will be for a minimum period of eight years.

After the eight years, the developers will be able to use the properties as they deem best.

With this plan, the government hopes to offer affordable housing to vulnerable population groups and increase the number of properties available on the market.

Increase of building coefficient and allocation of land to vulnerable population groups

The second party of the strategy includes increasing the building coefficient by 25%. Land developers will be able to use the 15% as they please, while the 10% will be given to the Cyprus Land Development Corporation (KOAG), which will offer them to vulnerable population groups, for the average construction cost.

For example, if a developer builds flats in an area of 1,250 m2, 100m2 will be given to KOAG.

The building coefficient will be subject to increase depending on the net area of the land to be used for construction.

Increased rent help to refugees, residents of remote and mountain areas

Under the strategy, the government will provide increased rent-help to refugees and residents of remote areas and 110 mountain communities.

Remote areas are defined as those  near the Green Line in the municipalities of Nicosia and Ayios Dometios, as well as Pano and Kato Pyrgos, Lympia, Mosfili, Potamia, Denia, Mammari, Pigenia, Pachyammos in Nicosia, Athienou, Troulloi, Pyla in Larnaca, Dherynia, Achna, Frenaros, Strovilia, Avgorou and Acheritou in Famagusta.

Beneficiaries of the scheme will be Cypriot or EU citizens who have been residing continuously in the country for a period of five years.

The Home Financing Organisation will also offer housing loans with low interest rates.

In addition, the government will offer subsidies to acquire houses depending on family and income status. Specifically it will offer €20,000 to single persons, €30,000 for couples, €35,000 for families with children and single-parent families, €40,000 for families with four children and more. An additional €10,000 will be offered to people with disabilities.

Labour Minister Zeta Emilianidou told the House Interior Committee that in the period of 2015 to 2018 , rents in Nicosia and Limassol have jumped by 30% to 40%.

MPs and citizens groups criticised the government for failure to act and the absence of social welfare housing initiatives.

The number of homeless people in the country is rising, according to welfare service figures.

Read more:

Demand exceeding supply behind rising rentals