Around 1,100 affordable rental homes are expected to be created in Cyprus over the next two years, as part of the Government’s housing policy and planning incentive schemes.
Interior Minister Konstantinos Ioannou said the schemes are expected to deliver more than 4,000 homes in total. Of these, 1,100 will be reserved for affordable rent.
A further 460 affordable rental homes are planned on state land. Construction is expected to begin in December 2027, with completion targeted for April 2031.
The figures were presented during a parliamentary Finance Committee discussion of the Interior Ministry’s 2027 budget, where housing affordability took centre stage. State spending on housing policy is set to exceed €70 million in 2027.
“The key priority is addressing the housing issue,” Mr Ioannou said, adding that the Government would continue its housing policy, which aims to increase the supply of homes and provide financial support to people seeking a place to live.
Strict bank lending criteria pose a challenge
MPs also raised concerns that bank lending rules are making it harder for people to access housing support. DIKO MP Panikos Leonidou said banks do not always fully account for state grants when assessing loan applications or the deposit borrowers need. He urged the minister to put pressure on lenders.
Mr Ioannou said the ministry had met with the Association of Banks and tried to press for change, but without success. He added that the ministry had little room for further intervention and that the Central Bank’s options were also limited.
The minister described banks’ lending criteria as excessive. AKEL MP and Interior Committee chairman Aristos Damianou also pointed to difficulties in securing loans, particularly for young couples.
Cyprus rents seen stabilising in 2026
Speaking after the committee meeting, Mr Ioannou said Cyprus does face a housing problem, though he considered it less severe than in some other countries.
He compared rents in Madrid, saying they amount to 140% of average income there. In Cyprus, he said, rents have not reached that level, partly because of the housing measures introduced over the past three years.
The minister also said rents appear to be stabilising across all districts in 2026.
MPs call for more affordable homes
DISY MP Nikoleta Constantinou said the mismatch between housing supply and demand remains the central problem. She called for more affordable homes, including through the use of vacant buildings and unfinished developments, as well as stronger social housing measures.
She said the Government should make full use of available funding and direct more resources towards increasing the stock of affordable homes.
AKEL described the housing problem as increasingly severe. Mr Damianou said past policies had contributed to the situation, including the “golden passport” scheme and the sale of Cypriot land to major foreign interests.
The party argued that existing housing schemes were not being implemented sufficiently. It called for a stronger role for the Cyprus Land Development Corporation and proposed setting up a body to help people access housing loans, building on an earlier commitment.
Interior Ministry’s 2027 budget
The Interior Ministry’s 2027 budget totals €780 million. Regular spending, including operating costs and salaries, accounts for €517.4 million, or 65% of the total. Development spending stands at €263.5 million, representing 33.1%.
Implementation of the 2026 budget is expected to reach at least 85%. Excluding spending by the Directorate-General for European Funds, implementation during the first ten months of 2026 was almost 7% higher than in the same period of 2025.
