CYPRUS: Call for action over sky-high rents

As rents reach new heights with every passing month, pressure is building on the government to take affirmative action to ensure affordable accommodation for working families.

Rental prices in Cyprus are increasing at record speed with rents going through the roof at an alarming annual rate in almost all regions of the island.

According to data cited by the Labour Ministry, the annual rate of increase is highest in Paphos at 68%, 58% in Limassol, 45% in Nicosia, 43% in Larnaca and 5% in Famagusta.

The data was collected in a study conducted for the Labour Ministry and presented by Minister Zeta Emilianidou during a joint press conference with Interior Minister Constantinos Petrides last month.

According to the Property Valuers Association, prices for a two-bedroom flat in Nicosia are between EUR 550-950, 600-950 in Limassol, and 450-550 in Paphos and Larnaca.

This is indicative of the level rents have reached in recent years which has forced the government to revisit its housing policy and issuing new incentives for affordable housing.

The state’s policy revolves around two axes, the pre-existing subsidizing of rents, new incentives given to developers to build affordable housing while drawing up plans to have the Cyprus Land Development Corporation build homes to house poor families.

As decided in 2014, the rent subsidy was set at 70% of the average price to exclude excessively high prices that affect the average family, while it is expected that beneficiaries of the Guaranteed Minimum Income make efforts to secure housing at more favourable prices.

The Labour Minister recently presented changes to the subsidy rules which are to include criteria similar to those for beneficiaries of the GMI.

Documents accompanying the regulations to be examined by parliament also show examples of the change in the rent allowance based on the results of a new study.

According to the examples, the rent allowance for a two-bedroom apartment with an average rental price of Euros 2.80 per square meter increases from Euros 224 from the 2014 study to Euros 324.80 based on the 2019 study.

Another prong to the state’s housing policy will see the government raising the building coefficient by 25% or 30% for apartment buildings. In the context of the “affordable housing” scheme, developers will be allowed to keep part of the construction built with the additional space, while the remainder will be used to accommodate vulnerable groups.

Source: The Financial Mirror