More than 2,500 new housing units are expected to enter the market through the government’s Planning Incentives Scheme, Interior Minister Constantinos Ioannou said on Tuesday, as authorities seek to increase supply and ease pressure on prices.
Speaking to reporters on the sidelines of the House Refugees Committee, Ioannou said 47 applications had so far been submitted and approved under the scheme through the fast-track licensing process. These applications correspond to more than 2,500 residential units, of which 400 will be made available as affordable housing.
The minister said the government’s approach is based on the need to expand the available housing stock, arguing that higher supply is essential if Cyprus is to address shortages in the market and prevent further price increases.
“The intention is to increase supply so that there is a better balance between supply and demand, prices can be eased, or at least remain at current levels and not rise further,” Ioannou said, according to a ministry statement.
How the scheme works
Under the Planning Incentives Scheme, the state grants an additional building coefficient of up to 45 per cent, on condition that part of the added development capacity is allocated to affordable housing.
Ioannou described the scheme as the government’s flagship housing measure, saying it increases both the overall housing stock and the number of affordable units available.
He also said the scheme has generated €17 million through the option to buy out part of the building coefficient. The money is being deposited in the Special Fund for Affordable Housing of the Cyprus Land Development Corporation.
According to the ministry, funding generated through the scheme will support the construction in 2026 of 244 units for affordable sale and 192 units for affordable rent.
Fast-track licensing
Ioannou said housing is also high on the European Union’s agenda, with particular emphasis on affordable housing and faster licensing procedures to bring new units to the market more quickly.
“This is still being discussed in the EU. We have been implementing it in Cyprus for a year,” he said, adding that the figures are changing weekly because of strong interest.
According to data for May, 930 apartment buildings and around 3,000 houses have been licensed, which translates into about 9,000 flats whose construction can begin immediately, the minister said.
He added, however, that one of the challenges facing the housing sector is that the private construction industry is already operating at full capacity.
Decisions after assessment
Responding to a journalist’s question, Ioannou said all housing measures announced by the ministry follow a detailed technical and economic assessment, including whether they can be practically implemented.
“We speak with actions, not words. Anything we announce is after evaluation,” he said.
Asked why taller apartment buildings are not being approved in order to create more flats, Ioannou said there is already a possibility to approve one or two additional floors. In the case of houses, he said many are located in areas where a second floor is already allowed, but other factors discourage owners from proceeding.
“Some parties say this possibility should be given, but it already exists. So before we speak, we must look at what the solutions are and evaluate them,” he said.
Ioannou also referred to the revision of local development plans, saying the process has started and the new plans are expected to be announced around the end of 2027. He said this is expected to boost development not only in housing, but also in business, industry, livestock farming and agriculture.
“The easiest thing is to say that two additional floors should be allowed in all areas. It is not that simple. Decisions are taken after assessment because they have consequences,” he said.
Source: CNA
