The time when citizens chose to rent not just due to financial necessity, but because the monthly rent was significantly lower than a mortgage repayment, has passed in Cyprus. Today, the monthly rent often matches or even exceeds the cost of a mortgage instalment for acquiring a home.
Interior Minister Constantinos Ioannou, who is responsible for the government’s housing programmes, made this observation. Responding to a question from DIKO MP Christos Senekis, Ioannou provided data showing that the number of displaced persons applying for rental subsidy has decreased from 4,509 in 2022 to 3,155 in 2024. He clarified that, simultaneously, the number of individuals seeking to acquire property has increased, a trend he attributes to the surge in rental costs.
Ioannou stated that “based on the data maintained, a slight decrease in applicants for rental subsidy and a simultaneous increase in applications for purchasing or construction schemes has been observed over the last three years.” He noted that given the market conditions, particularly the increase in rents, many are choosing to buy a house or apartment because a housing loan instalment is now comparable to the market rent. Subsidised recipients were 4,509 in 2022, 3,712 in 2023, and 3,155 in 2024. The government increased subsidy amounts by approximately 15% starting on 1 January 2024 to tackle the upward trend in rents.
The Minister’s response highlights the explosion of rents and the increased pressure to improve the state provisions for acquiring owner-occupied housing.
The housing scheme KtizO, specifically for displaced persons, is currently underway, with its implementation (over ten years) expected to cost approximately €130 million. Other housing schemes are also in effect. The number of beneficiaries of housing assistance has risen since 2013, following the recognition of the children of displaced women as refugees, not just those of displaced fathers, making them also eligible for assistance.
Mr Senekis had also asked the Interior Minister whether he intended to update and revise the income criteria governing the Rental Subsidy Scheme for single individuals and organic families under the Service for the Care and Rehabilitation of Displaced Persons, given that they have remained unchanged for over 15 years.
The Minister informed the DIKO MP that the Service for the Care and Rehabilitation of Displaced Persons has sent a Bill to the Law Office for legal vetting. Ioannou said the purpose of the Bill is to “abolish Articles 22 to 26 of the Rent Control Law concerning rental subsidies for displaced persons and affected individuals, the appointment of a Rental Subsidy Officer, the Hierarchical Appeal for decisions by the Rental Subsidy Officer, and the duration of the validity of the above articles.”
This abolition will allow for the issuance of “assessment criteria” for Rental Subsidy Scheme applications that will govern the subsidy. “With the approval of the Bill, specific assessment criteria will be submitted to the Council of Ministers for approval, which will include both the method of calculating incomes and new tables of income criteria,” Ioannou said. He added that the goal is to increase the potential number of displaced beneficiaries who can take advantage of the Scheme and ensure its more accurate implementation.
Regarding the implementation rate of the budget and the approved funding for the Rental Subsidy, the Minister stated that this, on average, over 90% of the funds were absorbed during the 2022-2024 three-year period: 93.54% in 2022, 93.76% in 2023, and 85.39% in 2024.
Ioannou explained that “any savings are not left unspent but are transferred to the other Housing Schemes for the displaced that relate to the purchase, construction, or repair of a house/apartment, where there is over-absorption, thus covering a greater number of approvals than the initially approved budget.”