(Commonwealth_Europe) Cyprus is set to witness a decline in both rental and property purchase prices over the coming years, according to President Nikos Christodoulides. This announcement was made during a dinner hosted by the Cyprus Property Developers Association in Limassol, where the president addressed stakeholders in the real estate and construction sectors. The president attributed the expected in housing costs to a series of strategic housing developments that are aimed at restoring a balance between supply and demand in the property market.
In his remarks, President Christodoulides emphasized the vital role of real estate and construction in the national economy, highlighting that the sector contributes around 15 percent to Cyprus’ gross domestic product and provides employment for over 40,000 individuals. Recognizing the importance of this sector, he expressed appreciation for the collaborative efforts of the Cyprus Property Developers Association, whose contributions he described as constructive in reinforcing the country’s economic and business development framework. He noted that this cooperation has made the economy more resilient and better positioned to compete regionally and globally.
The president took the opportunity to detail several ongoing reforms and strategic initiatives targeting the housing sector. He explained that the government’s current housing policy is designed to address longstanding housing challenges, especially those faced by young people. The approach is based on increasing the supply of affordable housing units through a series of targeted measures. One of the core components of this strategy is the national housing initiative titled Stegazo to Mellon mou, which includes urban planning incentives and a Build to Rent scheme. These programs are specifically structured to encourage developers to contribute to the affordable housing market.
Under these initiatives, developers who participate are granted a bonus in their building coefficient—ranging between 25 to 45 percent—on the condition that some or all of the additional units constructed are made available at affordable rates. The Interior Ministry has reported significant interest in these schemes from both developers and citizens, indicating broad support and high engagement from the community. As of now, more than 1,900 new residential units are expected to be developed under these plans, with a substantial portion reserved for affordable housing.
President Christodoulides also announced that over €8 million generated from the sale of additional building rights will be allocated to the Cyprus Land Development Organisation (Koag). These funds will be specifically used to support further initiatives within the affordable housing sector, helping to expand the reach and effectiveness of government housing policies.
Looking ahead, the president expressed optimism that these efforts would lead to a noticeable market correction in the years to come. As new housing stock enters the market, the balance between supply and demand is expected to improve, resulting in a downward trend in both rental and property purchase prices. Evidence of this shift is already emerging. Christodoulides cited recent data showing a slowdown in the rate of housing price increases, beginning in the third quarter of 2024 and continuing into the fourth quarter. This trend is reflected in the latest House Price Index released by the Central Bank of Cyprus.
Based on current projections and the interest shown in government housing programs, authorities expect this deceleration to persist in the short term. Christodoulides also referenced a recent European Union statistical report that ranked Cyprus 24th out of 27 member states in terms of rent and housing price increases, reinforcing the narrative of a cooling market.
In addition to housing initiatives, the president addressed the importance of streamlining permitting processes to boost housing availability. He outlined the government’s reform the approval time for urban planning and building permits. Specifically, new timelines will limit the issuance period to 40 working days for low-risk developments and 80 working days for medium-risk projects. These reforms are expected to enhance construction efficiency and speed up the delivery of new housing units.
Furthermore, the president confirmed that legislation is in progress to regulate jointly owned buildings. The bill, which is currently under legal review, is expected to be submitted to parliament soon. Its objective is to improve the management of such properties and resolve longstanding disputes that have often hindered their maintenance and usability.
In the broader context of governance and economic modernization, Christodoulides reiterated Cyprus’ commitment to completing all technical requirements for Schengen Area accession by the end of 2025. He also highlighted the establishment of the Business Support Center, a new initiative aimed at enhancing the efficiency of the public sector and supporting a more favorable investment environment.
In closing, President Christodoulides underscored the government’s overarching goal: to improve the productivity and effectiveness of public service in order to benefit the business community and, ultimately, the Cypriot economy as a whole.
