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CYPRUS: Government's affordable housing policy comes under fire

20 May, 2019

Stakeholders in the Cyprus real estate sector are critical of the government’s new affordable housing policy as they find it to be shoddy and short of the mark.


The government’s action plan, officially announced on Friday, includes granting developers an increase on the building coefficient in exchange for apartments with affordable rents or prices.

It also includes the construction of new housing units by the state and rent subsidies for displaced persons.

This is in response to rental accommodation becoming too expensive and a fear homelessness is on the rise.

Chairman of the Cyprus Property Owners Association (KSIA),  George Mouskides finds the government’s new policy to be dangerous as it will create ghettos much like those in the old Soviet Union.

"The government wants to give money to the Cyprus Land Development Corporation to build housing to house poor families instead of giving them the right to choose their apartments by subsidizing rents,” Mouskides told Stockwatch.

He argued that the government’s action plan was drawn up to serve the interests of a specific group of businesses without caring whether ghettos will be formed in the long run.

“I see a complete lack of sensitivity on the part of the state.”

Mouskides said that the government's incentives to the private sector are in the wrong direction as they include the “unacceptable condition that for a development to be included in the affordable housing scheme, it would need to have a net area of at least 2000 sqm”.

"This measure excludes 99% of land parcels in Cyprus because the majority cover around 520 - 560 sqm,” he said explaining that the scheme is essentially facilitating big developers.

Echoing the same concerns, Danos Real Estates CEO, Panos Danos, added that the government did not prepare its policy based on an expert study.

"We have not seen the conclusions and the findings of such a study," he said.

He also wondered "who are they addressing when they talk about affordable housing of €80,000 or €100,000 and what are the criteria. Also, what criteria will be applied to choose areas where the affordable housing will be built, and to choose who will build it? "

Danos said that the coefficient incentives given to developers are clearly I their favour.

“What are we trying to achieve? To satisfy developers or the need for affordable housing? I’m not sure”.