Signs of stabilization in the rental market, a 25% increase in building permits in the first seven months of 2026 and a strengthening of the supply of housing through urban planning incentives, state developments and affordable housing plans, are recorded as the positive results of the Government's housing policy, states the Minister of the Interior Konstantinos Ioannou, noting at the same time that the goal is to increase the supply of affordable housing.
In an interview with the Cyprus News Agency, the Minister of Interior estimates that the stabilization of rents over the last 12 months is the first step before their possible reduction, while pointing out that the increase in construction activity will begin to be reflected in the real supply of housing in one to two years, when the developments for which permits have already been issued are completed.
Mr. Ioannou assesses the assessment of the course of housing policy to date as positive, acknowledging, however, that the problem remains acute, as demand continues to exceed supply.
Among the main interventions promoted are the "Built to Rent" plan, with urban planning incentives that can increase the building factor by up to 45% and with an obligation to make part of the additional homes available at affordable prices, the construction of 460 houses on state land with an investment of €70 million, as well as the concession of about 570 plots to 20 communities at 25% of their value. At the same time, the Government intends to re-announce in 2027 the financial support plan for young and young couples under the age of 41, while discussing with the Ministry of Finance ways to facilitate access to mortgage credit, including the possibility of an interest rate subsidy.
Initially asked to evaluate the effectiveness of the Government's housing policy, the Minister noted that housing policy cannot yield immediate results, as the measures taken today take time to be converted into integrated homes and placed on the market. "A problem with housing policy is that you are taking measures today and the results of the measures, due to the specificity of housing, we will see in 2-3 years, because these houses have to be built," he said.
Explaining the causes of the housing problem, Mr. Ioannou said that in Cyprus there is no balance between supply and demand, with demand being significantly greater than the available supply. This situation, as he mentioned, began to take shape in 2022, while it was exacerbated by the inflationary pressures that followed the war in Ukraine and the increase in construction costs, which was passed on to buyers.
He added that to the already increased demand was added exogenous demand, which could not be predicted and still exists, contributing to the imbalance of the market.
As an indication of the strengthening of construction activity, the Minister cited the data on building permits, according to which an increase of 25% was recorded in the first seven months of 2026. He estimated that this increase is also linked to government measures, both rapid licensing and urban planning incentives used by the private sector for the construction of additional housing units. The new units, he said, will begin to enter the market in one to two years.
He also made special reference to the course of rents, noting that, despite the increases recorded in previous years, during the last 12 months there has been a stabilization, especially in 2026. As he said, after the successive increases of 2022, 2023 and 2024, the upward trend seems to have reached its peak. "The growth curve has now peaked and stabilized, which is the first step before the reduction," he said, adding that the increase in construction costs over the past two years was not further passed on to rents.
"Built to Rent" and affordable housing
Asked about the "Built to Rent" plan, through which more than 4,000 homes are expected to be created in the next two years, with more than 1,100 available as affordable, Mr. Ioannou described it as an emblematic intervention to increase supply.
He explained that urban planning incentives have been granted with an additional building factor of 25% to 45%, giving as an example that a landowner who had the opportunity to build 100 apartments can now, under the conditions of the plan, build up to 145. Of the additional units, part of them must be made available at affordable prices, with the obligation to concern 20 of the 45 additional residences in the example he cited.
In this way, he noted, the overall increase in supply and the disposal of a significant part of the additional units at prices lower than those of the market are achieved at the same time. "First we succeed in increasing the supply to the whole. 45 additional apartments and of these 20, i.e. almost half, will be affordable," he said.
Asked to answer how the determination of the affordable price is ensured, the Minister said that for houses for sale, the prices of the Cyprus Land Development Organization (KOAG), which operates on the basis of cost, are used as a basis. For rents, it has been determined that they should be at least 30% lower than the rent in force in the specific area, according to the data published at regular intervals by the Land Registry.
He gave as an example an area where the average rent is €1,000, clarifying that in order for the rent of a house to be considered affordable under the plan, it cannot exceed €700. To ensure compliance with the terms, he said that there will be an audit by the competent service and the relevant contracts will be submitted. "They will give the contracts. There is control both by the service and by the submission of the contract," he said.
The 460 houses on state land and the cost of €70 million.
Asked about the project for the construction of 460 affordable rental homes on state land, with a total investment of €70 million, for which work is expected to start in December 2027 and be completed in 2031, the Minister acknowledged that this is an intervention with a significant cost, which is part of the effort for the state to take an active role in the construction of affordable housing.
As he said, the Government is not limited to providing incentives to the private sector, but is also proceeding with the utilization of state land, while important work is also undertaken by the KOAG. This development, at a cost of €70 million, will be financed by the European Union.
Mr. Ioannou explained that in order to be able to implement the project, suitable state plots had to be identified beforehand, the plots had to be separated, roads had to be created and the necessary infrastructure had to be ensured by the competent services. In collaboration with ETEK, an architectural competition was announced, which was awarded about two months ago, while the construction will be done using the design and build method, with an assignment to the private sector.
This choice, he said, is aimed at speeding up the procedures, as the works will not be carried out directly by the state. However, after the completion of the architectural competition, the documents must be prepared and the tenders must be announced, following the procedures provided by law.
"The shortest timeframe we can build these houses is the one we are implementing now," he said, underlining that the timetables that have been set are the shortest possible based on the procedures to be followed.
He added that if the Government relied exclusively on the direct construction of houses by the state, their placing on the market would require an even longer period of time. That is why, as he explained, housing policy is based on more than one tool, with a particular emphasis on mobilizing the private sector.
Asked whether additional state land can be used for similar developments, the Minister replied that this is possible, but warned that there is a misconception as to the extent and suitability of state land. The majority of the available plots are located in agricultural zones or in areas where residential development is not permitted. For the 460 houses, as he said, a great effort was made to identify plots within residential areas and near urban centers, where there is real demand.
At the same time, he noted that the financial cost must also be taken into account, since this development requires an expenditure of €70 million, an amount that is not negligible.
Concession of about 570 plots of land to 20 communities
Answering another question, Mr. Ioannou referred to the plan for the development of state land in the countryside, through which plots of land are granted to beneficiaries at 25% of their value, with the aim of addressing the housing problem outside urban centers as well.
As he mentioned, state plots have been identified in communities and land separation procedures have been carried out, while in some cases additional plots have been identified. In total, the plan concerns about 570 plots in 20 communities, with the relevant announcements already published and the Service accepting applications from interested parties.
He clarified that the basic condition is that the beneficiaries are residents of the specific community or live within a radius of 15 kilometers from it, as the aim is to meet the housing needs of the local communities. At the same time, income criteria are applied, which are common to those of the other housing plans. As an example, he mentioned that for a couple with one child, the income limit is €50,000.
The concession at 25% of the value of the plot, he said, significantly reduces the acquisition cost, while this amount does not include the separation costs, which will also not be borne by the beneficiaries in the context of this pricing.
Mr. Ioannou noted that the plan will not be limited to the approximately 570 plots that have already been identified. The communities in which there is state land have been informed that, if there are at least ten interested parties in acquiring a plot of land, they can submit an application to the relevant District Officers, so that the possibility of new divisions can be examined.
"We will not stay on these 570 plots," he said, adding that several applications have already been submitted and that the plan will remain open for a long time, in order to enable other communities, in which there were no already segregated plots, to join.
Re-announcement of the plan for young people and young couples in 2027
Asked about the financial support for young and young couples under the age of 41 and the Government's intention to re-announce it, the Minister said that from 2025 two support measures for financially vulnerable young people are being implemented, pointing out that the Government chooses to implement such plans sparingly, so as not to further strengthen demand without correspondingly increasing the supply of housing.
In this context, he reminded that the plan for mountainous, remote areas and the countryside is still being implemented, which provides financial support of up to €130,000. At the same time, last year, a one-time financial assistance scheme of €50,000 was implemented to young people and young couples under the age of 41 who met specific income and other criteria.
According to Mr. Ioannou, almost 1,050 applications were submitted, of which about 700 were deemed valid and approved in their entirety, with the total expenditure amounting to €26 million. The Government's goal, he said, is to re-announce the plan in 2027, most likely for a smaller number of beneficiaries, as most of the applications that met the conditions have already been satisfied.
Asked whether the income criteria could be revised upwards, in order to cover couples who are left out for a small difference in income, the Minister said that each plan has specific limits and it is inevitable that some interested parties will not meet the conditions, even for a small difference.
He reminded, however, that last year the income criteria for housing plans were increased from €45,000 to €50,000, in order to expand the number of potential beneficiaries. "With the existing ones we have, we receive too many applications," he noted, explaining that the adjustment of the limits must take into account both the real needs and the available financial possibilities.
He made special reference to the housing assistance provided through the Refugee Welfare Service, which amounts to a total of about €45 million, with financial support reaching up to €30,000. As he said, income criteria are also applied in this plan, however a differentiation was introduced to deal with cases of beneficiaries who exceeded the prescribed limit by €100, €200 or €300.
With the new regulation, when the income exceeds the specified limit by up to 10%, the excess is deducted from the amount of financial aid that the applicant is entitled to receive. In this way, according to the Minister, the complete exclusion of people who are marginally above the income criteria is avoided.
Discussions on housing loan facilitation
Asked about the Government's intentions to create a special body to facilitate the access of young and young couples to borrowing, the Minister revealed that the issue is being discussed with the Ministry of Finance and that a meeting is scheduled for November 20, during which various recommendations will be put forward for evaluation.
He expressed reservations, however, as to how such a mechanism could work, underlining that the repetition of practices that led to the creation of non-performing loans in the past must be avoided. At the same time, he acknowledged that there is a real need to support citizens who, despite their stable income, find it difficult to secure financing for the acquisition of housing.
He also said that banks have recorded a record number of applications and approvals for mortgages, which he described as positive, noting, however, that there may be room for additional facilitations on their part.
The Minister avoided referring in detail to the proposals that have been submitted to the Ministry of Finance, as it has not yet been determined which ones can be implemented. Among the options being considered, as he mentioned, is the subsidy of the interest rate, based on practices applied in other countries. "We have put some ideas that are being done in other countries. We will have the discussion on November 20 when we will have the meeting with the Ministry of Finance," he said, expressing the hope that some of them will be positively evaluated and move forward.
Asked whether there is a timetable for decision-making, Mr. Ioannou said that he would like them to have already been taken, underlining that his personal philosophy is to quickly promote decisions and put pressure on the services to implement them. "My personal philosophy is that I want to move at a very fast pace in whatever I decide," he noted, adding that the Ministry of the Interior, due to its direct contact with citizens, has a special responsibility to improve their daily lives.
Asked about the role of the KOAG, Mr. Ioannou said that the Organization has already taken on an enhanced role in the implementation of housing policy. As he said, the Organization is proceeding with the construction of about 760 residential units, which will be completed this year and in 2027, with some intended for sale and others for affordable rent. He contrasted this production with the previous period, noting that from 2022 to 2024 the KOAG had delivered about 30 units.
The Government, he added, consciously decided to upgrade the role of the Organization, providing it with financial support through the housing plans and the budget of the Ministry of the Interior.
"KtiZO" plan: Delays and the responsibility of the owners
Asked to comment on the criticism of delays in the implementation of the "ktiZO" plan, especially after the remarks that out of the 19 apartment buildings planned to be delivered, only one has been completed so far, the Minister of the Interior defended the philosophy of the plan, arguing that the responsibility for the speed of the promotion of the works has now been transferred to the owners themselves.
As he mentioned, "ktiZO" is an emblematic intervention, with the primary goal of the safety of refugees living in refugee settlements, where problems had been identified for years in apartment buildings without substantial measures having been taken.
Mr. Ioannou reminded that 20 apartment buildings had been deemed immediately demolished and that the first step was to evacuate them, with the state undertaking the payment of rents for the housing of the beneficiaries in other residences. The next stage concerned the demolition and construction of new apartment buildings.
He explained that the Government chose to differentiate the way of implementation, as in the past the direct undertaking of such projects by the state, through the Department of Urban Planning, was accompanied by long delays due to the restrictions and procedures governing public tenders.
In the context of "ktiZO", about 90% of the apartments are now privately owned and, therefore, "it was decided to grant the money to the beneficiaries, with a small contribution of their own for reasons of equality and compliance with state aid rules. The state also covers the cost of civil engineering and provides guidance to owners, many of whom are elderly," he said.
The process, as he described, provides that the owners of an apartment building choose a civil engineer from the available professionals, ask for offers and decide with which company they will proceed with the construction. "We give the money to the beneficiaries, we pay the civil engineer, there is also guidance from us and now it is up to them how to proceed," he said.
Mr. Ioannou argued that the different rates of progress between apartment buildings prove that the delays are no longer solely due to the state, since all beneficiaries started from the same starting point and received the same tools. According to the planning he listed, one apartment building has been completed, the second is expected to be delivered within days, the third at the beginning of 2027 and the fourth during the Easter period. These four new apartment buildings will replace eight existing ones, as each new development corresponds to two of the old ones.
He noted that in some cases the proceedings were even delayed due to practical issues, such as the death of a beneficiary, which made it necessary to appoint an heir in order to continue the proceedings and sign the relevant documents. For such cases, he said, the state appointed a lawyer to help resolve the issues.
At the same time, he also referred to the apartment buildings that do not need demolition but repair. These are more than 300 apartment buildings, for which the second and third phases of the plan were accelerated, so that the works could start earlier than originally planned.
As he said, for a year and a half the owners have been informed that they are entitled to state aid of €300,000 for repairs, an additional €90,000 for the installation or upgrade of an elevator and €10,000 for the civil engineer, in order to proceed with securing offers and implementing the works.
Despite the update, so far about 60 to 70 apartment buildings out of about 300 have shown interest, with the first renovations starting now. The Minister wondered why owners do not take advantage of state aid, which allows them to immediately repair their apartment buildings instead of waiting for ten or fifteen years until it is their turn for state intervention.
As one of the most important obstacles, he mentioned the need for consent of all owners of an apartment building. As he said, in several cases one or two owners refuse to consent, either because they are absent or because they rent out their apartments and do not wish to participate in the process, thus preventing the progress of the others.
Asked whether the legislation can be amended so that the consent of the majority, such as 70% or 75% of the owners, is sufficient, Mr. Ioannou said that the issue conflicts with constitutional issues, as it concerns the right to property. "It is a question of constitutionality, because it concerns the ownership status of anyone on which we cannot intervene," he said.
Increase in refugee housing assistance in 2027
In relation to the rent subsidy for refugees, the Minister of the Interior, answering a question from KYPE, announced that from the beginning of 2027 there will be an increase in both the amounts paid and the income criteria, so that the plan better meets the current conditions.
He did not want to reveal the amount of the increase, explaining that, although the amount has already been determined, the budget will have to be approved first and then the relevant announcements will have to be made. "At the beginning of 2027 we will increase the amount and the criteria," he said, clarifying that he cannot yet disclose specific amounts before the approval of the budget.
The reform of Local Government needs improvements
Asked about the reform of Local Government, Mr. Ioannou said that the new structure, which includes the Communities, Municipalities and Provincial Self-Government Organizations (EOA), is an improved version of the previous system, but has not yet achieved the desired level of operation.
As he said, from the beginning it had been pointed out that the reform would need improvements, as the model that was finally adopted in 2022 was the result of compromises, in order to ensure the required consensus in Parliament.
In particular, he referred to the mergers of the Municipalities, which were reduced from 30 to 20, with the main goal of creating economies of scale. However, he noted that the benefit is not the same in all cases, as some Municipalities, such as Strovolos and Paphos, were not merged with other Municipalities, while in other cases the mergers were limited to one Municipality and two communities.
On the contrary, in the case of Nicosia, where four Municipalities were merged, he estimates that there are real possibilities to achieve economies of scale, although the results cannot be seen immediately. As he explained, the merger of organizations, as is the case in businesses, takes time until it yields the expected benefits.
"Certainly more could have been done in mergers, but what has been done has been done and there is improvement. The situation could be much better," he said.
Benefits of Clustering Communities
He described the impact of the reform on the Communities as particularly positive, noting that clustering offers significant administrative and economic benefits, especially to smaller communities that faced serious difficulties in their operation.
As he explained, communities with a population of 100, 250 or 300 inhabitants were not able to employ sufficient staff, use European funds or have a specialized accountant to monitor their finances. This shortage, according to the Minister, had created problems in the administrative operation and had led to cases of irregularities.
With clustering, seven, eight, ten or even twelve communities can now operate through a common administrative scheme, acquiring the possibility of staffing with specialized personnel. Between five and nine posts are planned, including for administrators and accounting staff, so that communities can draw services from a centralized system.
Mr. Ioannou acknowledged that there was a delay in the staffing of the complexes, which, as he said, is now beginning to be addressed. He added that the state allocated €3.5 million. to cover the salary costs, responding to a request from the communities, so that they do not burden themselves with the new hires.
"Now they are being hired, after two and a half years," he said, expressing the assessment that the operation of the clusters will significantly enhance the ability of communities to provide services and meet the needs of their residents.
Two-speed EOA
As far as the Provincial Self-Government Organizations are concerned, the Minister noted an improvement mainly in the areas of water supply and sewerage, while regarding licensing he acknowledged that, despite the steps forward, there are still significant weaknesses.
He pointed out that there is a picture of a two-speed EOA, as some organizations have gone much further than others in examining and issuing licenses.
At the same time, he wanted to clarify that the state does not have the ability to interfere in the way the NGOs operate, as they are independent organizations, both administratively and financially. The organizations are self-financed and managed by an elected President and a board of directors, which includes ten Mayors and six Deputy Mayors of the respective province.
Therefore, as he mentioned, citizens who face problems or have complaints should contact the relevant EOA directly, as he as Minister of the Interior does not have the authority to give instructions for changes in the way they operate.
"Unfortunately, according to legislation, the state cannot intervene," he said, adding that the role of the Ministry is to provide the necessary tools so that organizations can operate more efficiently.
Asked whether the state could contribute more through advice or other interventions, Mr. Ioannou replied that advice is provided, without it being always certain that it is adopted. The main responsibility of the Ministry, as he said, is the approval of the budgets of the EOAs, while interventions can be made when issues arise that require legislative changes.
He recalled that before the implementation of the reform, a package of 22 measures was promoted for the better functioning of the agencies. Among them was the creation of a single manual for permitting procedures, as 46 different building authorities previously operated, each with its own practices and requirements.
With the unification of procedures, he said, professionals no longer need to know different rules depending on the authority to which they apply, while services now operate under a common framework.
Acceleration of Planning Permits
He placed particular emphasis on the reform of licensing procedures, which he described as one of the most important interventions that have been made in the field of Urban Planning.
As he explained, for houses that do not require a derogation, the planning permit is now issued within 40 days, while for apartment buildings up to 20 apartments, the licensing process is expected to be completed within 80 days, with 40 days for the planning permit and another 40 days for the building permit.
According to the Minister, this is a significant change compared to the previous regime, during which the issuance of licenses could require one, one and a half or even two years.
He cited, in fact, data on the implementation of the new system, noting that from the start of its implementation until September 7, 2026, about 3,000 permits for residences and 1,400 permits for apartment buildings up to 20 apartments had been issued.
"1,400 permits for apartment buildings up to 20 apartments in 80 days. This also helps housing policy because in the past this would have taken 2 and 3 years," he said.
He added that the simplification of procedures and the reduction of bureaucracy also allow EOA staff to have more time to review other applications, contributing to the overall acceleration of licensing.
He acknowledged that all EOAs have increased their pace, however the degree of improvement varies from organisation to organisation. He recalled that the creation of the EOAs resulted from the assumption that the previous system of 46 different authorities was not functioning effectively and that consolidation into five agencies could address its weaknesses.
Asked when the reform of Local Government can be considered complete and its effectiveness fully evaluated, Mr. Ioannou said that there is no specific timetable, estimating, however, that the two and a half years of implementation are a sufficient period for a first substantial evaluation.
Concluding, he noted that the final evaluation of the operation of the Municipalities belongs primarily to the citizens themselves, who have the ability to judge the performance of local authorities through the daily service and services they receive.
Explaining the causes of the housing problem, Mr. Ioannou said that in Cyprus there is no balance between supply and demand, with demand being significantly greater than the available supply. This situation, as he mentioned, began to take shape in 2022, while it was exacerbated by the inflationary pressures that followed the war in Ukraine and the increase in construction costs, which was passed on to buyers.
He added that to the already increased demand was added exogenous demand, which could not be predicted and still exists, contributing to the imbalance of the market.
As an indication of the strengthening of construction activity, the Minister cited the data on building permits, according to which an increase of 25% was recorded in the first seven months of 2026. He estimated that this increase is also linked to government measures, both rapid licensing and urban planning incentives used by the private sector for the construction of additional housing units. The new units, he said, will begin to enter the market in one to two years.
He also made special reference to the course of rents, noting that, despite the increases recorded in previous years, during the last 12 months there has been a stabilization, especially in 2026. As he said, after the successive increases of 2022, 2023 and 2024, the upward trend seems to have reached its peak. "The growth curve has now peaked and stabilized, which is the first step before the reduction," he said, adding that the increase in construction costs over the past two years was not further passed on to rents.
"Built to Rent" and affordable housing
Asked about the "Built to Rent" plan, through which more than 4,000 homes are expected to be created in the next two years, with more than 1,100 available as affordable, Mr. Ioannou described it as an emblematic intervention to increase supply.
He explained that urban planning incentives have been granted with an additional building factor of 25% to 45%, giving as an example that a landowner who had the opportunity to build 100 apartments can now, under the conditions of the plan, build up to 145. Of the additional units, part of them must be made available at affordable prices, with the obligation to concern 20 of the 45 additional residences in the example he cited.
In this way, he noted, the overall increase in supply and the disposal of a significant part of the additional units at prices lower than those of the market are achieved at the same time. "First we succeed in increasing the supply to the whole. 45 additional apartments and of these 20, i.e. almost half, will be affordable," he said.
Asked to answer how the determination of the affordable price is ensured, the Minister said that for houses for sale, the prices of the Cyprus Land Development Organization (KOAG), which operates on the basis of cost, are used as a basis. For rents, it has been determined that they should be at least 30% lower than the rent in force in the specific area, according to the data published at regular intervals by the Land Registry.
He gave as an example an area where the average rent is €1,000, clarifying that in order for the rent of a house to be considered affordable under the plan, it cannot exceed €700. To ensure compliance with the terms, he said that there will be an audit by the competent service and the relevant contracts will be submitted. "They will give the contracts. There is control both by the service and by the submission of the contract," he said.
The 460 houses on state land and the cost of €70 million.
Asked about the project for the construction of 460 affordable rental homes on state land, with a total investment of €70 million, for which work is expected to start in December 2027 and be completed in 2031, the Minister acknowledged that this is an intervention with a significant cost, which is part of the effort for the state to take an active role in the construction of affordable housing.
As he said, the Government is not limited to providing incentives to the private sector, but is also proceeding with the utilization of state land, while important work is also undertaken by the KOAG. This development, at a cost of €70 million, will be financed by the European Union.
Mr. Ioannou explained that in order to be able to implement the project, suitable state plots had to be identified beforehand, the plots had to be separated, roads had to be created and the necessary infrastructure had to be ensured by the competent services. In collaboration with ETEK, an architectural competition was announced, which was awarded about two months ago, while the construction will be done using the design and build method, with an assignment to the private sector.
This choice, he said, is aimed at speeding up the procedures, as the works will not be carried out directly by the state. However, after the completion of the architectural competition, the documents must be prepared and the tenders must be announced, following the procedures provided by law.
"The shortest timeframe we can build these houses is the one we are implementing now," he said, underlining that the timetables that have been set are the shortest possible based on the procedures to be followed.
He added that if the Government relied exclusively on the direct construction of houses by the state, their placing on the market would require an even longer period of time. That is why, as he explained, housing policy is based on more than one tool, with a particular emphasis on mobilizing the private sector.
Asked whether additional state land can be used for similar developments, the Minister replied that this is possible, but warned that there is a misconception as to the extent and suitability of state land. The majority of the available plots are located in agricultural zones or in areas where residential development is not permitted. For the 460 houses, as he said, a great effort was made to identify plots within residential areas and near urban centers, where there is real demand.
At the same time, he noted that the financial cost must also be taken into account, since this development requires an expenditure of €70 million, an amount that is not negligible.
Concession of about 570 plots of land to 20 communities
Answering another question, Mr. Ioannou referred to the plan for the development of state land in the countryside, through which plots of land are granted to beneficiaries at 25% of their value, with the aim of addressing the housing problem outside urban centers as well.
As he mentioned, state plots have been identified in communities and land separation procedures have been carried out, while in some cases additional plots have been identified. In total, the plan concerns about 570 plots in 20 communities, with the relevant announcements already published and the Service accepting applications from interested parties.
He clarified that the basic condition is that the beneficiaries are residents of the specific community or live within a radius of 15 kilometers from it, as the aim is to meet the housing needs of the local communities. At the same time, income criteria are applied, which are common to those of the other housing plans. As an example, he mentioned that for a couple with one child, the income limit is €50,000.
The concession at 25% of the value of the plot, he said, significantly reduces the acquisition cost, while this amount does not include the separation costs, which will also not be borne by the beneficiaries in the context of this pricing.
Mr. Ioannou noted that the plan will not be limited to the approximately 570 plots that have already been identified. The communities in which there is state land have been informed that, if there are at least ten interested parties in acquiring a plot of land, they can submit an application to the relevant District Officers, so that the possibility of new divisions can be examined.
"We will not stay on these 570 plots," he said, adding that several applications have already been submitted and that the plan will remain open for a long time, in order to enable other communities, in which there were no already segregated plots, to join.
Re-announcement of the plan for young people and young couples in 2027
Asked about the financial support for young and young couples under the age of 41 and the Government's intention to re-announce it, the Minister said that from 2025 two support measures for financially vulnerable young people are being implemented, pointing out that the Government chooses to implement such plans sparingly, so as not to further strengthen demand without correspondingly increasing the supply of housing.
In this context, he reminded that the plan for mountainous, remote areas and the countryside is still being implemented, which provides financial support of up to €130,000. At the same time, last year, a one-time financial assistance scheme of €50,000 was implemented to young people and young couples under the age of 41 who met specific income and other criteria.
According to Mr. Ioannou, almost 1,050 applications were submitted, of which about 700 were deemed valid and approved in their entirety, with the total expenditure amounting to €26 million. The Government's goal, he said, is to re-announce the plan in 2027, most likely for a smaller number of beneficiaries, as most of the applications that met the conditions have already been satisfied.
Asked whether the income criteria could be revised upwards, in order to cover couples who are left out for a small difference in income, the Minister said that each plan has specific limits and it is inevitable that some interested parties will not meet the conditions, even for a small difference.
He reminded, however, that last year the income criteria for housing plans were increased from €45,000 to €50,000, in order to expand the number of potential beneficiaries. "With the existing ones we have, we receive too many applications," he noted, explaining that the adjustment of the limits must take into account both the real needs and the available financial possibilities.
He made special reference to the housing assistance provided through the Refugee Welfare Service, which amounts to a total of about €45 million, with financial support reaching up to €30,000. As he said, income criteria are also applied in this plan, however a differentiation was introduced to deal with cases of beneficiaries who exceeded the prescribed limit by €100, €200 or €300.
With the new regulation, when the income exceeds the specified limit by up to 10%, the excess is deducted from the amount of financial aid that the applicant is entitled to receive. In this way, according to the Minister, the complete exclusion of people who are marginally above the income criteria is avoided.
Discussions on housing loan facilitation
Asked about the Government's intentions to create a special body to facilitate the access of young and young couples to borrowing, the Minister revealed that the issue is being discussed with the Ministry of Finance and that a meeting is scheduled for November 20, during which various recommendations will be put forward for evaluation.
He expressed reservations, however, as to how such a mechanism could work, underlining that the repetition of practices that led to the creation of non-performing loans in the past must be avoided. At the same time, he acknowledged that there is a real need to support citizens who, despite their stable income, find it difficult to secure financing for the acquisition of housing.
He also said that banks have recorded a record number of applications and approvals for mortgages, which he described as positive, noting, however, that there may be room for additional facilitations on their part.
The Minister avoided referring in detail to the proposals that have been submitted to the Ministry of Finance, as it has not yet been determined which ones can be implemented. Among the options being considered, as he mentioned, is the subsidy of the interest rate, based on practices applied in other countries. "We have put some ideas that are being done in other countries. We will have the discussion on November 20 when we will have the meeting with the Ministry of Finance," he said, expressing the hope that some of them will be positively evaluated and move forward.
Asked whether there is a timetable for decision-making, Mr. Ioannou said that he would like them to have already been taken, underlining that his personal philosophy is to quickly promote decisions and put pressure on the services to implement them. "My personal philosophy is that I want to move at a very fast pace in whatever I decide," he noted, adding that the Ministry of the Interior, due to its direct contact with citizens, has a special responsibility to improve their daily lives.
Asked about the role of the KOAG, Mr. Ioannou said that the Organization has already taken on an enhanced role in the implementation of housing policy. As he said, the Organization is proceeding with the construction of about 760 residential units, which will be completed this year and in 2027, with some intended for sale and others for affordable rent. He contrasted this production with the previous period, noting that from 2022 to 2024 the KOAG had delivered about 30 units.
The Government, he added, consciously decided to upgrade the role of the Organization, providing it with financial support through the housing plans and the budget of the Ministry of the Interior.
"KtiZO" plan: Delays and the responsibility of the owners
Asked to comment on the criticism of delays in the implementation of the "ktiZO" plan, especially after the remarks that out of the 19 apartment buildings planned to be delivered, only one has been completed so far, the Minister of the Interior defended the philosophy of the plan, arguing that the responsibility for the speed of the promotion of the works has now been transferred to the owners themselves.
As he mentioned, "ktiZO" is an emblematic intervention, with the primary goal of the safety of refugees living in refugee settlements, where problems had been identified for years in apartment buildings without substantial measures having been taken.
Mr. Ioannou reminded that 20 apartment buildings had been deemed immediately demolished and that the first step was to evacuate them, with the state undertaking the payment of rents for the housing of the beneficiaries in other residences. The next stage concerned the demolition and construction of new apartment buildings.
He explained that the Government chose to differentiate the way of implementation, as in the past the direct undertaking of such projects by the state, through the Department of Urban Planning, was accompanied by long delays due to the restrictions and procedures governing public tenders.
In the context of "ktiZO", about 90% of the apartments are now privately owned and, therefore, "it was decided to grant the money to the beneficiaries, with a small contribution of their own for reasons of equality and compliance with state aid rules. The state also covers the cost of civil engineering and provides guidance to owners, many of whom are elderly," he said.
The process, as he described, provides that the owners of an apartment building choose a civil engineer from the available professionals, ask for offers and decide with which company they will proceed with the construction. "We give the money to the beneficiaries, we pay the civil engineer, there is also guidance from us and now it is up to them how to proceed," he said.
Mr. Ioannou argued that the different rates of progress between apartment buildings prove that the delays are no longer solely due to the state, since all beneficiaries started from the same starting point and received the same tools. According to the planning he listed, one apartment building has been completed, the second is expected to be delivered within days, the third at the beginning of 2027 and the fourth during the Easter period. These four new apartment buildings will replace eight existing ones, as each new development corresponds to two of the old ones.
He noted that in some cases the proceedings were even delayed due to practical issues, such as the death of a beneficiary, which made it necessary to appoint an heir in order to continue the proceedings and sign the relevant documents. For such cases, he said, the state appointed a lawyer to help resolve the issues.
At the same time, he also referred to the apartment buildings that do not need demolition but repair. These are more than 300 apartment buildings, for which the second and third phases of the plan were accelerated, so that the works could start earlier than originally planned.
As he said, for a year and a half the owners have been informed that they are entitled to state aid of €300,000 for repairs, an additional €90,000 for the installation or upgrade of an elevator and €10,000 for the civil engineer, in order to proceed with securing offers and implementing the works.
Despite the update, so far about 60 to 70 apartment buildings out of about 300 have shown interest, with the first renovations starting now. The Minister wondered why owners do not take advantage of state aid, which allows them to immediately repair their apartment buildings instead of waiting for ten or fifteen years until it is their turn for state intervention.
As one of the most important obstacles, he mentioned the need for consent of all owners of an apartment building. As he said, in several cases one or two owners refuse to consent, either because they are absent or because they rent out their apartments and do not wish to participate in the process, thus preventing the progress of the others.
Asked whether the legislation can be amended so that the consent of the majority, such as 70% or 75% of the owners, is sufficient, Mr. Ioannou said that the issue conflicts with constitutional issues, as it concerns the right to property. "It is a question of constitutionality, because it concerns the ownership status of anyone on which we cannot intervene," he said.
Increase in refugee housing assistance in 2027
In relation to the rent subsidy for refugees, the Minister of the Interior, answering a question from KYPE, announced that from the beginning of 2027 there will be an increase in both the amounts paid and the income criteria, so that the plan better meets the current conditions.
He did not want to reveal the amount of the increase, explaining that, although the amount has already been determined, the budget will have to be approved first and then the relevant announcements will have to be made. "At the beginning of 2027 we will increase the amount and the criteria," he said, clarifying that he cannot yet disclose specific amounts before the approval of the budget.
The reform of Local Government needs improvements
Asked about the reform of Local Government, Mr. Ioannou said that the new structure, which includes the Communities, Municipalities and Provincial Self-Government Organizations (EOA), is an improved version of the previous system, but has not yet achieved the desired level of operation.
As he said, from the beginning it had been pointed out that the reform would need improvements, as the model that was finally adopted in 2022 was the result of compromises, in order to ensure the required consensus in Parliament.
In particular, he referred to the mergers of the Municipalities, which were reduced from 30 to 20, with the main goal of creating economies of scale. However, he noted that the benefit is not the same in all cases, as some Municipalities, such as Strovolos and Paphos, were not merged with other Municipalities, while in other cases the mergers were limited to one Municipality and two communities.
On the contrary, in the case of Nicosia, where four Municipalities were merged, he estimates that there are real possibilities to achieve economies of scale, although the results cannot be seen immediately. As he explained, the merger of organizations, as is the case in businesses, takes time until it yields the expected benefits.
"Certainly more could have been done in mergers, but what has been done has been done and there is improvement. The situation could be much better," he said.
Benefits of Clustering Communities
He described the impact of the reform on the Communities as particularly positive, noting that clustering offers significant administrative and economic benefits, especially to smaller communities that faced serious difficulties in their operation.
As he explained, communities with a population of 100, 250 or 300 inhabitants were not able to employ sufficient staff, use European funds or have a specialized accountant to monitor their finances. This shortage, according to the Minister, had created problems in the administrative operation and had led to cases of irregularities.
With clustering, seven, eight, ten or even twelve communities can now operate through a common administrative scheme, acquiring the possibility of staffing with specialized personnel. Between five and nine posts are planned, including for administrators and accounting staff, so that communities can draw services from a centralized system.
Mr. Ioannou acknowledged that there was a delay in the staffing of the complexes, which, as he said, is now beginning to be addressed. He added that the state allocated €3.5 million. to cover the salary costs, responding to a request from the communities, so that they do not burden themselves with the new hires.
"Now they are being hired, after two and a half years," he said, expressing the assessment that the operation of the clusters will significantly enhance the ability of communities to provide services and meet the needs of their residents.
Two-speed EOA
As far as the Provincial Self-Government Organizations are concerned, the Minister noted an improvement mainly in the areas of water supply and sewerage, while regarding licensing he acknowledged that, despite the steps forward, there are still significant weaknesses.
He pointed out that there is a picture of a two-speed EOA, as some organizations have gone much further than others in examining and issuing licenses.
At the same time, he wanted to clarify that the state does not have the ability to interfere in the way the NGOs operate, as they are independent organizations, both administratively and financially. The organizations are self-financed and managed by an elected President and a board of directors, which includes ten Mayors and six Deputy Mayors of the respective province.
Therefore, as he mentioned, citizens who face problems or have complaints should contact the relevant EOA directly, as he as Minister of the Interior does not have the authority to give instructions for changes in the way they operate.
"Unfortunately, according to legislation, the state cannot intervene," he said, adding that the role of the Ministry is to provide the necessary tools so that organizations can operate more efficiently.
Asked whether the state could contribute more through advice or other interventions, Mr. Ioannou replied that advice is provided, without it being always certain that it is adopted. The main responsibility of the Ministry, as he said, is the approval of the budgets of the EOAs, while interventions can be made when issues arise that require legislative changes.
He recalled that before the implementation of the reform, a package of 22 measures was promoted for the better functioning of the agencies. Among them was the creation of a single manual for permitting procedures, as 46 different building authorities previously operated, each with its own practices and requirements.
With the unification of procedures, he said, professionals no longer need to know different rules depending on the authority to which they apply, while services now operate under a common framework.
Acceleration of Planning Permits
He placed particular emphasis on the reform of licensing procedures, which he described as one of the most important interventions that have been made in the field of Urban Planning.
As he explained, for houses that do not require a derogation, the planning permit is now issued within 40 days, while for apartment buildings up to 20 apartments, the licensing process is expected to be completed within 80 days, with 40 days for the planning permit and another 40 days for the building permit.
According to the Minister, this is a significant change compared to the previous regime, during which the issuance of licenses could require one, one and a half or even two years.
He cited, in fact, data on the implementation of the new system, noting that from the start of its implementation until September 7, 2026, about 3,000 permits for residences and 1,400 permits for apartment buildings up to 20 apartments had been issued.
"1,400 permits for apartment buildings up to 20 apartments in 80 days. This also helps housing policy because in the past this would have taken 2 and 3 years," he said.
He added that the simplification of procedures and the reduction of bureaucracy also allow EOA staff to have more time to review other applications, contributing to the overall acceleration of licensing.
He acknowledged that all EOAs have increased their pace, however the degree of improvement varies from organisation to organisation. He recalled that the creation of the EOAs resulted from the assumption that the previous system of 46 different authorities was not functioning effectively and that consolidation into five agencies could address its weaknesses.
Asked when the reform of Local Government can be considered complete and its effectiveness fully evaluated, Mr. Ioannou said that there is no specific timetable, estimating, however, that the two and a half years of implementation are a sufficient period for a first substantial evaluation.
Concluding, he noted that the final evaluation of the operation of the Municipalities belongs primarily to the citizens themselves, who have the ability to judge the performance of local authorities through the daily service and services they receive.
