In three axes the contribution of KOAG for affordable housing, says DG Eleni Symeonidou – “At the moment we think we have achieved the recipe that made the construction sector interested” he said
The development program of the Cyprus Organization < strong>Development Land(KOAG) will move on three axes, in order for the Organization to provide affordable housing for purchase or rent to the beneficiaries, the General Director of the Organization, Eleni Simeonidou, said to KYPE, emphasizing the contribution of KOAG to alleviating the housing problem.
Among the programs managed by KOAG are ready-made houses for sale at an affordable price, the construction of apartment buildings for renting apartments with affordable rent and the management of urban planning incentives that announced the Ministry of the Interior, which aim to provide cheap apartments from private individuals.
According to Mrs. Symeonidou, the beneficiaries are determined by criteria decided periodically by the Council of Ministers and concern medium and low paid.
“Build-Sell”: Sale of ready-made houses and apartments
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The first axis of the development program of KOAG, according to Mrs. Symeonidou, is “to offer housing solutions as we have been offering for almost 45 years, that is, to build and sell houses and apartments to the average and low-income earners”, she noted.
As he said, at the moment there are apartments immediately available in Kaimakli, which can also be combined with the sponsorship plans for the critical areas, with the beneficiaries benefiting from sponsorship, in addition to the affordable price of the houses of the OCAG.
In addition, he mentioned that apartments are under construction in Larnaca, which are expected to be completed at the beginning of February 2025. According to the General Director of KOAG, those apartments are the result of an international architectural competition and have a special design, as they are basically floor apartments. In addition, their price (€153,000 for a two-bedroom) includes a photovoltaic system and cooling-heating devices.
The next project that will begin in 2024 are residences in Polemidia, also the result of an architectural competition, with a futuristic design .
Furthermore, projects are planned in Agios Dometios, Aglantzia, Lakatamia, Kokkinotrimithia, while plots will be “cut” in the provinces of Nicosia, Limassol, Larnaca and Paphos.
Asked if the future projects concern apartments or residences, Mrs. Symeonidou replied that the projects in Polemidia and Kokkinotrimithia concern residences. However, he added, the need for cities points to apartments. “We try to use the land we have in a way that will produce the greatest number of units. If I have a plot of land in Agios Dometios with a high building factor, I cannot 'waste' it by producing houses. I have to make apartments. The investments we have made in real estate recently have been in inner cities. This means we will produce apartments,” he said.
Despite the affordable price of the houses, Mrs. Symeonidou said that there are problems in the approval of financing of the beneficiaries by the banks. “People are interested, they submit their applications, but there are some issues with the financing,” he said, noting that with the increase in interest rates and the size of the installment formed by them, people are struggling.
“We are processing some things that may help, however these must be compatible with the economic environment. We cannot regulate the market. We do everything we can to keep the selling price low so that people who can benefit from our own plans can be financed,” he noted.
“Build-Rent”: 600 apartments with affordable rent in Limassol in the coming years
Ms. Symeonidou told KYPE that the idea of building apartments that will be granted for rent at affordable rent began in 2019. “The first project we will have in this axis is the big project we are planning in collaboration with the Municipality of Limassol. We will build 138 units in the first phase to rent to the Municipality of Limassol”, he said.
He noted that construction work on the first apartment building will begin in October-November 2024 and it is expected that in 17 months there will be 37 units available for rent in Limassol and then work will begin on three more apartment buildings, for a total of 138 units.
“Our proposal is to implement the same plan in two other blocks of the Municipality of Limassol, in order to produce over the next six years 600 units for rent in Limassol, where we see that the problem is particularly acute in terms of rents”, he added.
Regarding the amount of rent for these units, Ms. Symeonidou said that the project will be financed to some extent by the state, which will have some requirements regarding the amount of rent. He noted that the terms of the financing are still under discussion, so we can't say the exact amount right now. “It will definitely be affordable. Our intention is to be at least 30% below market rent, with the intention of going even lower,” he said.
Urban planning incentives: affordable housing for sale by private individuals
The third axis on which KOAG moves is the management of the urban planning incentives announced by the Government. In particular, the state allows land development professionals or private individuals who will develop their plots to benefit from an additional building fee, provided that part of the additional they receive will be sold to beneficiaries indicated by KOAG, at the price will be determined by KOAG, which is the same price that the Organization sells.
“We don't want the businessman to suffer from this. He will sell to his construction cost almost half of the additional rate he will secure, and the rest he will use for his own profitable activities,” he said.
Giving an example, Ms. Symeonidou said that if someone could make 100 apartments on a block, now they will be able to make 145 apartments, of which 20 will have to be made available as affordable housing.
According to the General Director of KOAG, the Organization asks entrepreneurs to sell at €1,650/building meter, which for a 75 sq.m apartment corresponds to a price of €123,000. “This price more than covers the construction costs,” she said.
Asked if there has been any interest from businessmen in these plans, Mrs. Symeonidou said that there has been a big information campaign, with the organization of a conference, and according to private meetings, noting that promotions will resume in September.
“Right now we think we've hit the recipe that got the construction industry interested. The first agreement on the utilization of urban planning incentives was signed in July. We are excited to get started and it was proof that it really works,” he said, adding that the first deal will see a development in Ypsonas, which will provide six affordable housing units. “We will sell apartments in Ypsonas at €123,000,” he said.
