12.03.2022
Real estate and real estate development contribute to the creation of jobs and the growth of the Cypriot economy.
Development is controlled by the existing urban zones, which set certain factors such as building density, including land use, etc., which are reflected in the property value.
In the 1990s, the total building density was 220% of the land area. After that, with the revision of urban planning legislation, this rate was sharply reduced, which led to a lack of interest in real estate development. This ended with property prices rising to the point where Cypriots could not afford to buy a house or plot.
Over the past ten years, this administration has introduced several relaxations in the calculation of building density, thus achieving its increase. But still, what we have today is much lower than the original density of 220%.
A rather short-sighted approach is still with us, with the recent introduction of new areas of Paralimni, where hotel building density has been reduced from 70% to 40%, followed by so-called incentives to make development more attractive, resulting in modernization and expansion of housing.
Thus, increasing building density helps if it is used logically.
But then, for almost every added density incentive, other restrictions such as public space requirements, distance from boundaries, and more were introduced, almost nullifying the original incentives.This uncertainty in decision making was due to a 220% reduction in building density, which created confusion with this short-sighted approach by planners and government.
As building density increases, the value of real estate also increases.
For this reason, we have proposed taxation (a 20% levy on the increase resulting from increased building density), lands that are not developed should also be taxed so that property owners are encouraged to dispose of or develop them.
Our office proposed such approaches more than ten years ago.
However, despite the support it has received from the market and professionals, it has not yet been adopted or even discussed.
The objections of large landowners, including churches, stop such a progressive concept.
Antonis Luazou, real estate appraiser, real estate consultant and real estate agent
