16.09.2023
The government has come under pressure from stakeholders following news that a government-sponsored affordable housing project in Limassol has failed due to lack of funds.
The Cyprus Chamber of Science and Technology has called on the government to take “drastic” measures to solve the housing crisis in Limassol , as low-income families are left with no choice.
In a letter to President Nikos Christodoulides Konstantinos Constanti , chairman of the chamber advising the government, said the failure to deliver the housing project had crushed the dreams of 600 vulnerable families.
“Having a roof over your head is one of the most basic needs and should be treated as such.”
Constanti says the cost of owning or even renting a home has skyrocketed due to many different factors, making it an unattainable dream for most.
ETEK’s intervention comes after it emerged that an affordable housing project in Limassol had been delayed due to a lack of funding.
During a press conference on Thursday , Limassol Mayor Nikos Nicolaides announced that a government-funded project to build 600 housing units in Limassol had been cancelled. He said the project would be delayed indefinitely because there was a shortfall of 7 million euros out of the 20 million euros needed.
The shortfall is due to the cancellation of the Citizenship by Investment scheme in November 2020.
Under the latest changes, €75,000 of the €2.5 million invested by each foreign investor will go towards funding affordable housing before the scheme ends.
Nicolaides said affordable housing projects should not be cancelled, noting that the municipality had offered €25 million worth of land for the project.
The first phase included 138 apartments, with construction expected to begin by the end of last year.
The municipality has signed an agreement with the Cyprus State Land Development Corporation for the construction of 600 residential units in three municipal residential areas – two in Agios Nikolaos and one in Agios Ioannis – with a total area of 31,081 square meters.
Housing will be rented at low rents, which will help solve the problem of inflated costs of renting and purchasing real estate in Limassol .
Constanti said: “The project has been discussed for several years, but implementation by the government has not yet progressed. In the current conditions, which have made the purchase or rental of a house almost impossible, it is inconceivable that projects like this project in Limassol would be frozen. The implementation of the project is extremely important for the local community.”
Constanti said the state has an obligation to continue to increase the supply of housing units that meet the needs of citizens, especially in areas with housing shortages. “It doesn’t make sense that people are forced to leave their city because they can’t afford to pay high rent or buy an apartment or house.”
Constanti said a comprehensive approach is needed “because this is a multifaceted problem that clearly cannot be solved overnight. It is absolutely necessary to create a central body that will plan and coordinate issues related to state housing policy.”
President Nikos Christodoulides said the Limassol project will be included in the state’s affordable housing policy, which will be announced at the end of the month. According to him, the Ministry of Internal Affairs will announce a specific housing policy plan.
According to reports, the government plans to build the first affordable housing in Limassol by 2026.
Impossibility of renting real estate
Renting a property in Limassol has become mission impossible as estate agents report long waiting lists forming.
Highly paid professionals relocating to Cyprus along with technology and fintech companies have captured the market as they are willing to pay much higher rents than Cypriots.
Eleni Averkiu from the Danos /BNPRE group said that highly paid executives are willing to pay above the minimum wage (about 1,000 euros) just for a studio apartment.
“Highly paid employees can and are willing to pay up to 2,000 euros for an apartment, which leads to rising prices and the creation of a shortage of apartments. As a result, real estate agencies have long waiting lists, and students and families are essentially excluded from renting housing in the city,” Averkiu said.
The problem is becoming increasingly acute for students wishing to rent housing in the city. Renting a second class studio outside the city center will cost approximately 500–700 euros per month. Rent for a one-bedroom apartment starts from 700 euros, while a two-bedroom apartment costs between 1,000 and 1,200 euros per month. Three-bedroom apartments cost between 1,500 and 2,000 euros. “For new apartments, prices are well above the €2,000 mark,” she said.
