The government of Cyprus is actively tackling the housing crisis, Interior Minister Konstantinos Ioannou announced.

He pointed out a significant 44.4% increase in residential building permits during the first six months of 2024. This upswing, complemented by a slight reduction in construction material costs, is contributing to a recovery in the housing market, which has faced difficulties in recent times.

During a property development conference in Nicosia, Ioannou elaborated on the government’s housing strategy, emphasizing its aim to expand the availability of homes and enhance their affordability. The initiative, dubbed ‘Housing My Future,’ seeks to decrease prices by boosting supply and assisting young people and families in purchasing homes.

Despite ongoing upward trends in house prices and rents, the Central Bank of Cyprus notes that the rate of increase is decelerating, indicating a movement toward a more balanced housing market. Ioannou maintains that increasing the housing stock will continue to stabilize prices.

To promote construction, the government has rolled out urban planning incentives and the “Renovate to Rent” program. These initiatives allow developers to construct more residential properties, provided a portion is offered at affordable rates. Under “Renovate to Rent,” all new homes must be rented at reduced prices, while the urban incentives scheme mandates that 20% of extra units be sold affordably, with 25% available at market rates.

The minister expressed delight at the support from developers for these initiatives. Current agreements project the construction of over 1,900 new residential units, with nearly 300 designated for affordable housing. The government also anticipates generating €8.7 million for the Affordable Housing Fund.

However, Ioannou acknowledged prior delays in the building permit process, which were exacerbated when responsibility shifted to regional authorities as part of local government reforms in July 2024. He attributed these problems to the complexity of the transition and insufficient preparatory measures.

To address these challenges, the government has allocated 24% more staff to expedite building permit applications and has sanctioned 354 permanent positions in regional offices. Consequently, the number of processed applications has risen, though ongoing refinements remain necessary.

Further, the government is refining the approval process for residential developments to cut down on red tape and speed up permitting for low and medium-risk projects, which account for roughly half of all submissions.

In addition, plans are underway to relax restrictions on apartment types in tourist areas and reduce the minimum apartment size by 15% in certain residential zones. These regulatory changes aim to encourage increased housing development and make properties more accessible to the public.