The government, through its comprehensive housing policy, has over the past three years focused on increasing the housing stock and strengthening citizens’ purchasing power. Through targeted schemes, it is promoting the creation of affordable housing, the utilisation of state-owned land and the revitalisation of communities, Interior Minister Constantinos Ioannou says in an interview with P. At the same time, he reveals that under the new call of the housing scheme for the revitalisation of mountainous, border and disadvantaged areas, which is expected in 2026, displaced beneficiaries will receive a 20% higher grant. Mr Ioannou says he is determined to further strengthen the right to housing, support young people and vulnerable groups, and deliver results more quickly.
Three years on
Recognising the scale of the housing problem, you moved ahead with the implementation of a new housing policy. Almost three years on, what results have these interventions produced?
All the schemes implemented under the comprehensive housing policy, with the possible exception of the “Renovate – Rent” scheme, have received a very positive response from the public. Indicatively, through the Housing Schemes for the Revitalisation of Mountainous, Border and Disadvantaged Areas and Rural Areas, a total of 1,957 beneficiaries have so far received support, at a total cost of €74.2 million. In addition, under the scheme for young families and individuals under the age of 41, which concluded a few days ago, 1,033 applications were submitted, of which 295 have already been approved. I believe that once the examination of all applications is completed, we will meet our target of supporting 400 beneficiaries.
Increasing housing supply
These figures relate to the pillar of strengthening purchasing power. What about the objective of increasing the housing stock?
Progress in this area is even more encouraging. Based on current interest in the Planning Incentives Schemes and the “Build to Rent” scheme, nearly 2,000 housing units are expected to be created over the next two years, of which 260 will bolster the stock of affordable housing. Furthermore, based on interest shown so far in the purchase of additional building density, it is estimated that approximately €11 million will flow into the Special Affordable Housing Fund of the Cyprus Land Development Corporation, to be used for the implementation of its own programmes, which in turn will place a significant number of additional affordable housing units on the market.
The role of the CLDC, which we have upgraded to serve as the executive arm of the state’s housing policy, is extremely important in this effort, and our support for the Organisation is continuous. By way of example, I refer to the allocation of €16 million by the state for the first phase of the Affordable Rental Scheme in Agios Nikolaos, Limassol, as well as additional financial support of €12 million for the production of 54 units in Strovolos. Within 2025, the CLDC commenced construction of 181 housing units in Nicosia and Limassol, while construction of a further 258 units is expected to begin in 2026.
“Renovate – Rent”
What do you intend to do with the “Renovate – Rent” scheme, which did not attract the desired level of interest?
The aim of the scheme, which was proposed by the Cyprus Scientific and Technical Chamber (ETEK), is the immediate utilisation of existing idle housing stock. Under the scheme, owners of vacant and unused homes in municipal areas may receive a grant ranging from €15,000 to €35,000 for renovation and upgrading, on the condition that the property is offered to affordable-rent beneficiaries for a period of four years.
Despite the generous subsidy, interest in the scheme has remained lower than expected. To date, 63 applications have been submitted, of which 34 have been approved, 11 rejected and 18 are under examination. Following consultations with property owners who had initially expressed interest but did not proceed with an application, we identified the difficulties involved and, once again in cooperation with ETEK, we are moving immediately to improve the scheme so as to make it more attractive. We believe it can contribute significantly to the immediate increase of available housing stock.
Increases for displaced persons
For housing acquisition, many citizens rely heavily on state financial assistance. Do you intend to increase the level of state grants, and if so, under which schemes?
The allocation of very high grant amounts can lead to price increases, thereby undermining the objective of strengthening purchasing power. Certain weaknesses identified in procedural matters were addressed through an extensive revision of the relevant provisions. At the same time, we improved the schemes so that they better reflect real conditions and, above all, benefit a larger number of beneficiaries.
Within this framework, significant changes were made to the housing schemes for rural and mountainous areas, as well as those administered by the Welfare Service. Very shortly, we will announce further revisions to specific schemes in order to extend their reach to more citizens. Indicatively, I can mention the already adopted decision to increase by 20% the amount granted to displaced beneficiaries under the housing scheme for mountainous, border and disadvantaged areas.
Collective accommodation
Last Tuesday you announced a new housing scheme for the construction of collective accommodation units. How did the need for this scheme arise and who does it target?
The difficulty faced by workers in the industrial, tourism and retail sectors in securing accommodation often acts as a barrier to employment in these sectors, hindering the smooth operation of businesses. At the same time, the use of housing units to accommodate seasonal staff exacerbates the housing problem in areas already under significant pressure, while we frequently witness cases where third-country nationals are housed in accommodation unsuitable in terms of hygiene and safety.
Based on these needs, and in coordination with organised stakeholders in the relevant sectors, we designed the Housing Scheme for the Construction of Collective Accommodation Units, which enables the creation of housing solutions for staff employed in these sectors. The scheme is expected to deliver multiple social and economic benefits, as it aims both to cover the short- and medium-term accommodation needs of workers - particularly seasonal workers - and to ease housing pressures by freeing up units for use by other citizens.
Housing and the EU Presidency
Housing will be one of the priorities of Cyprus’s EU Presidency, as you have said. Is the government’s housing policy aligned with the discussions taking place on a European affordable housing strategy?
To a very large extent, yes. Several of the policies already being implemented in Cyprus are currently under discussion at EU level. One such proposal concerns ways of reducing bureaucracy in order to accelerate the entry of new units into the market - something we have achieved in Cyprus through reform of the development licensing sector.
By adopting simplified procedures, we reduced licensing times to a total of 40 working days for single and semi-detached houses, and 80 working days for apartment buildings of up to 20 flats. Already, more than 1,500 applications for single and semi-detached houses have been examined under the fast-track procedure within the 40-day timeframe, while more than 260 applications for apartment buildings have been examined within the 80-day limit.
Displaced persons’ housing policy
The implementation of the state’s policy for displaced persons falls under the Service for the Welfare and Rehabilitation of Displaced Persons (SWRDP). There are thousands of applications pending. Are you aware of reports and complaints regarding delays?
To address the problem, the schemes administered by the Welfare Service have, since this year, been implemented in revised and simplified form, with higher income thresholds and broader beneficiary categories. For 2024 and up to September this year, a total of 3,677 applications have been approved, with total expenditure amounting to €82.5 million.
It is true that in the past there were delays in the examination of applications, partly due to understaffing. However, over the past three years staffing levels at the Service’s district offices have been strengthened, while certain stages of the procedure have been simplified, resulting in reduced processing times. Data from the SWRDP show that the examination rate stood at 72.6% in 2022, rose to 118.3% in 2023, increased further to 156.4% in 2024, and currently stands at 198.2%. As a result, at present, in all districts, applications are examined within the six-month timeframe prescribed by law.
Allocation of state-owned plots
The state owns thousands of land plots around cities as well as in rural areas. Why are free plots not allocated to eligible beneficiaries who have the capacity to build their own homes, instead of providing financial grants through the Welfare Service?
The implementation of a scheme for the allocation of plots is something we have already examined and forwarded to the Legal Service. It is a programme that responds to a long-standing demand from local communities, as it would bring multiple benefits to village revitalisation beyond simply addressing housing needs.
The scheme aims to support low- and middle-income families, with an emphasis on young families seeking to acquire owner-occupied housing. There is already interest from communities wishing to participate, and we will be in a position to announce further details once the legal vetting of the scheme is completed.
The same philosophy underpins the scheme announced by the President of the Republic last week. By utilising state-owned land, we are moving forward with the implementation of the Housing Scheme for the Construction of Affordable Homes - approximately 500 units in Nicosia, Limassol, Larnaca and Paphos - with a total investment of €77 million. The new housing units will be allocated to affordable-rent beneficiaries based on specific criteria, with an emphasis, as the President stated, on the younger generation.
The state-owned plots will be allocated to the private sector through competitive tender for construction under the Design and Build method, while remaining under state ownership.
This article was originally published in the Politis Sunday Edition.