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From time to time we opt to “blow our own trumpet” regarding suggestions and solutions to the real estate problems that come up and which are adopted several years later.
Twelve years ago, we reported in this lovely paper the insanity of fixing the square meter of housing units (in addition to the other parameters).
With the economic crisis and the reduction of incomes, the middle class, especially young people, cannot afford to buy their own home end up renting which resulted in the increase of residential rental units (among other reasons).
Rental levels are nowadays around 1/3 of the gross income of a person or if both (as a couple) work it is around 1/5 of the income (plus the down payment and running expenses).
With the increased building costs and sales prices, the problem of non-affordable housing surfaced, thanks to various journalists and others exposing the problem. In past publications (4 times) we repeated our warnings over non-affordable housing, but nobody listened.
Ireland experienced a similar problem, the Government at that time introduced the “affordable housing scheme” and the P.M. declared that housing units should be of such a cost, that people can afford to buy (affordable housing).
In Cyprus, we set up a nonsensical scheme declaring that a one bedroom apartment should not be smaller than 60 sqm. and a two-bedroom flat 100 sqm. and for the third bedroom unit 120 sqm.
With the prevailing sales prices of €2,000/sqm. (including VAT + transfer fees) for the residential units, you do appreciate that if a two-bedroom apartment is reduced to 60 sqm as opposed to 80 sqm., the price difference is around €40.000!!
Yet nobody bothered to address this not even the so-called Advisor to the Government (ETEK Technical Chamber), the architects and planners associations and of course nobody bothered to ask the developers.
When I set up this office (A. Loizou) we lived as a young couple in a 60 sqm apartment and we were happy with it and then we moved on as our income improved.
The argument for having a fixed minimum for residential units was a requirement of the Town Planning Office, which said that “Cypriots cannot live in cages”. So, is it better to be without a roof over your head?
After the surfacing of non-affordable housing the Government is now trying to correct this sad situation by suggesting the increase of building density and thus having a lower land cost per unit, the imposition of various criteria including that the benefited development should be let out for at least 8 years (how does one check this?).
We “blow” our horn dear readers in the hope that someone in Government and others will listen.
Affordable housing apart, another problem is the town planning zones which are very low especially at the seaside areas (see western Larnaca with a building density of 20% and that of Polis are 15%).
End result, the coastal regions are taken over by foreign buyers who can afford them, leaving the lower income locals without an affordable home. Seaside land is running out and there will be no more land to explore by future generations.
Our common expenses law is a “curse” as we reported before.
It cannot be implemented and despite our efforts with the Governments/Ministers and although the Government realizes the problem, nothing is done (suggestions submitted).
We also recorded the problem of Private V Public Pools with many projects which cannot afford to upkeep their pools and having a problem with the titles issue.
The certificate of final approval (to be replaced, we suggest, by a safety certificate) is causing huge problems not only for real estate but for the tourist industry (hotels etc) as well – End result the occupation of such units is considered as being illegal!!
The phenomenon of the passports for investment is now in danger and we wrote about this 1½ years ago (as a result of which we received many offensive letters and calls). Yet now our Government is (is it?) having second thoughts (we offered solid suggestions).
The certificate of energy for each and every unit that is let or sold is a good measure, but then if one is letting a flat for €500 p.m. will the owner pay for such a certificate of around €120? Not workable in practice.
So, at the end of the day what are we doing dear readers? Keep on trying to change the situation or shall we go along with the current of indifference? We prefer the former in hope and if we were in Government we should ask the Auditor General to investigate the possibility of criminal offences committed by the following:
– The Directors of the Planning Bureau (at the time)
– The Ministers of Interior (at the time)
– ETEK for not providing the required guidance
Theory and Practice as we often say. The theory is okay but the practice? Don’t ask.
