The Cyprus government is stepping up efforts to make housing more accessible and prevent prices from spiraling out of control. A series of new initiatives aim to increase the supply of affordable homes and create a more balanced property market.
Speaking at the annual Real Estate and Construction Conference on March 20 2025, Interior Minister Constantinos Ioannou laid out a plan to tackle housing challenges and ensure fairer pricing.
What’s Changing?
- Smaller Apartments, More Homes – The government has approved a 15% reduction in the minimum required size for apartments. This means developers can build more units within the same space, increasing housing availability to meet growing demand.
- More Flexibility in Tourist Areas – By removing the mandatory requirement for certain housing allocations in tourist zones, developers will have more freedom, which should help balance the market. This proposal is nearing completion and will soon be debated in Parliament.
- Incentives for Developers – Builders can now gain extra development rights (between 25% and 45%) in exchange for dedicating a portion of their properties to affordable rentals for low-income families. Several agreements under this plan have already been made, leading to the construction of 1,900 new homes, 300 of which will be designated for social housing.
- Encouraging “Build to Rent” Projects – New developments in commercial zones will be designed specifically for long-term rentals. This approach should ease pressure on the housing market and contribute to price stabilization.
- Faster Building Permits – The time required to obtain building permits has been drastically reduced. Approvals for private homes and duplexes now take just 20 working days, while larger projects are processed within 40 working days.
- Grants for Renovating Vacant Homes – The government is offering grants ranging from €15,000 to €35,000 to encourage the refurbishment of empty properties, as long as they are rented out at affordable rates. Around 50 applications have been submitted so far, and over 400 people have signed up on the Cyprus Land Development Organization (COAG) platform. Authorities are also exploring additional funding to expand this program.
A Long-Term Commitment to Affordable Housing
Minister Ioannou highlighted that rising housing costs, higher construction expenses, and shifts in demographics make government intervention essential. To address this, the government is allocating land to low- and middle-income families, streamlining local permit processes, and fast-tracking applications for lower-risk projects—these make up nearly 50% of all submissions.
So far in 2024, the number of building permits issued in Cyprus has surged by 44.4%. Meanwhile, construction costs have started to decline, making life easier for developers. Data from the Central Bank also shows that property and rental price increases have started to slow.
Looking ahead, the government plans to expand the “Housing for My Future” program, which focuses on increasing affordable housing options for young people and families.
“We’re seeing the market slowly balance out, but our work isn’t done yet. We’re committed to keeping housing both affordable and comfortable for everyone,” Mr. Ioannou assured.
