22.08.2024
The Cyprus Land Development Corporation ( Koag ) is launching a major affordable housing programme aimed at providing citizens with opportunities to purchase or rent property at reduced prices. Koag CEO Eleni Simeonidou spoke about the three main areas of the program that will help to cope with the housing crisis on the island.
The first direction of the program is the sale of finished residential properties at affordable prices. As Simeonidou noted , Koag has been engaged in the construction and sale of residential properties for citizens with low and medium incomes for almost 45 years. Currently, apartments are available for sale in Nicosia in the Kaimakli area at a reduced price. These properties can be purchased with additional subsidies provided for border areas. The construction of residential properties in Larnaca is also ongoing , where by the beginning of February 2025, the construction of new apartments will be completed, the cost of which will be about 153,000 euros for a two-room apartment. These apartments have a modern architectural design and will be equipped with solar panels and climate control systems, making them energy efficient and more attractive to buyers. The next project will begin in 2024 in the Polemidia area and will include houses with a futuristic design. In addition, the corporation’s plans include the construction of residential properties in areas such as Agios Dimetrios , Aglandjia , Lakatamia and Kokkinotrimithia , as well as in the provinces of Limassol , Nicosia, Larnaca and Paphos. Depending on the location of the site, a decision will be made whether to build apartment buildings or individual residential buildings.
The second important area of the program is affordable rental housing. According to Simeonidou , the idea of building affordable rental apartments first emerged in 2019. One of the key projects in this area will be the construction of 138 residential units in Limassol in cooperation with the city municipality.
The third pillar of the program is to provide private developers with additional opportunities to increase their construction volumes, provided that some of the residential properties are sold or rented out at a reduced price. The program, launched by the government, allows developers to receive an additional development factor in exchange for a commitment to sell some of the properties they build at a price set by Koag . Simeonidou explained that developers can build more properties than the standard allows: for example, instead of 100 apartments, they can build 145, of which 20 will be sold at an affordable price and the rest at market value. The price of such apartments, according to Koag , will be around 123,000 euros for a 75 square meter residential property, which will cover construction costs and allow developers to keep a profit. The criteria for selecting those who can qualify for such residential properties are set by the government and cover middle- and low-income workers.
The initiative has already attracted interest from construction companies. Koag has organised a series of events and face-to-face meetings with industry representatives to highlight the benefits of participating in the programme. The first such deal was concluded in July and concerns a residential development in the Ypsonas area near Limassol , where six apartments will be provided at a reduced price as part of the affordable housing programme. These apartments will be sold at a price of €123,000, making them affordable for low-income citizens.
Despite efforts to reduce the cost of residential real estate, there are still some challenges. One of the main problems remains obtaining financing. Many potential buyers who have submitted applications are faced with refusals from banks due to difficult lending terms. Rising interest rates and increasing monthly payments make it difficult for most people to obtain a mortgage. Koag is trying to find ways to solve this problem, but all proposals must be consistent with the current economic realities. Koag is actively working to find solutions to make the financing process easier for citizens and to keep housing prices affordable for those who need it.
