Cyprus tackles the housing crisis and affordability issues

The Cyprus government is taking steps to address the housing crisis, with Interior Minister highlighting a 44.4% rise in building permits for residential units in the first half of 2024. This, combined with a slight drop in construction material costs, is helping to improve the housing market. The government’s housing policy, under the plan ‘Housing My Future,’ aims to increase the availability of homes and make them more affordable, particularly for young people and families.

Although house prices and rents have been rising, the Central Bank of Cyprus reports that the rate of increase is slowing, suggesting a more balanced market. To further support housing, the government introduced urban planning incentives and the “Build to Rent” scheme, which encourages developers to offer affordable homes. Over 1,900 new units are expected, with nearly 300 allocated to affordable housing.

However, there have been delays in issuing building permits, worsened by local government reforms in July 2024. To address this, the government has increased staff by 24% and created 354 new permanent positions. The government is also working to streamline the approval process for residential developments and plans to remove restrictions on apartment types in tourist zones and reduce the minimum apartment size in residential areas, aiming to make housing more accessible.