The government has come under pressure from stakeholders following news that a state-sponsored affordable housing project in Limassol has gone south due to a lack of funds.
The Cyprus Scientific and Technical Chamber urged the government to take “decisive” action to address a housing crisis in Limassol as lower-income families are being left without options.
In a letter to President Nikos Christodoulides, Constantinos Constanti, the chair of the chamber advising the government, said failure to deliver a housing project shattered the dreams of 600 vulnerable families.
“Having a roof over one’s head is one of the most basic needs and must be treated as such”.
Constanti argued the cost of acquiring or even renting a home, due to many varied factors, has skyrocketed, making it an elusive dream for most.
ETEK’s intervention comes as it emerged that an affordable housing project in Limassol has been shelved due to the lack of funding.
During a press conference on Thursday, Limassol Mayor Nicos Nicolaides announced that the state-financed project for the construction of 600 housing units in Limassol was called off.
He revealed the project would be indefinitely postponed as there was a deficit of €7 mln of the €20 mln needed.
The deficit was created due to the cancellation of the Citizenship for Investment scheme in November 2020.
According to the latest tweaks, €75,000 out of the €2.5 mln invested by each foreign investor would finance affordable housing before the scheme became defunct.
Nicolaides argued that projects on affordable housing should not be cancelled, noting that the municipality offered €25 mln of land for the project.
The first phase was to see 138 apartments built, the construction of which was due to start by the end of last year.
The municipality has signed an agreement with the state Cyprus Land Development Corporation to construct 600 residential units in three municipal residential areas – two in Agios Nikolaos and one in Agios Ioannis – covering 31,081 square metres for housing.
The housing units would be rented out for low rent, helping to address the inflated cost of renting and buying property in Limassol.
Constanti said: “The project has been discussed for several years; it is already at a mature stage.
“However, its implementation has not yet progressed on the part of the government.
“Under the prevailing conditions, which have made the acquisition or rental of a home next to impossible, it is unthinkable that projects like the one in Limassol are put on ice.
“The implementation of the project is imperative for the local community.”
Constanti said the state had an obligation to proceed to increase the supply of residential units that serve the needs of citizens, especially in areas with a housing shortage.
“It doesn’t make sense that people are forced to move out of their city because they can’t afford to pay high rents or buy an apartment or a house.”
Constanti said an integrated approach was needed “as it is a multidimensional problem that clearly cannot be solved overnight.”
“It is absolutely necessary to create a central body that will plan and coordinate issues related to the state housing policy.”
To appease concerns, President Nikos Christodoulides said the Limassol project will be included in the state’s affordable housing policy to be announced at the end of the month.
He said the Ministry of the Interior will announce a specific plan on housing policy.
“There will be a specific plan, with specific incentives, which we have been working on since the day we took over the country’s governance”.
According to reports, the government plans to make the first affordable housing units in Limassol available by 2026.
Impossible to rent
Renting in Limassol has become a mission impossible, as real estate agents now report that long waiting lists are being formed, a first for the second city.
High earners relocating to Cyprus, with tech and fintech companies, have taken over the market as they are willing to pay much higher rents than Cypriots.
In comments to the Financial Mirror, Eleni Averkiou of Danos/BNPRE Group said well-paid executives are willing to pay above the minimum wage, around €1,000, just for a studio flat.
“Highly paid employees are able and willing to pay up to €2,000 rent for an apartment, pushing up prices, creating a shortage of flats.
“As a result, estate agencies have long-waiting lists on their hands, with students and families essentially being excluded from renting in the city,” said Averkiou.
The problem is bigger for students looking to rent in the city.
Renting a second-class studio outside the city centre would cost around €500-700 a month.
Rents for a one-bedroom flat start at €700, while a two-bedroom flat would cost between €1,000 to €1,200 per month.
Three-bedroom flats cost between €1,500 to €2,000.
“When it comes to new apartments, prices are well over the €2,000 mark,” she said.