The KOAG plan, the increased interest, and the… delays

Housing is one of the main concerns for citizens, as real estate prices—whether for land or homes—are becoming increasingly unaffordable. From time to time, however, the government and various agencies announce programs aimed at making it easier to purchase a home or even a plot of land.

The Cyprus Land Development Organization (CLDO) is also entering the “game,” reintroducing—after nearly 15 years—the system of granting affordable state-owned plots of land. As has been emphasized from the very moment the plan was announced, this move marks a historic shift for KOAG, which, for the first time in its history, is proceeding with the sale of subdivided land, moving away from the model used to date, which was limited exclusively to the sale of turnkey homes and apartments.

Prices starting at €40,000

The Organization’s strategy focuses on keeping prices within a range of €40,000 to €50,000, an amount corresponding to approximately one-third (1/3) of current free-market prices in the respective areas.

This extremely affordable pricing is made possible because the land is already part of the KOAG portfolio from purchases made in previous years, and it is clarified that these are not Turkish Cypriot plots.

135 plots in four districts

The plots, which will have an average area of approximately 520 square meters, are currently in the licensing and subdivision stages. Their distribution by district is as follows:

• Nicosia (Kokkinotrimithia): 44 plots (building permits are pending from the relevant EOA).
• Limassol (Ypsonas): 36 plots (building permits are pending from the relevant EOA).
• Paphos (Timi): 31 plots (urban planning permit pending from the relevant EOA).
• Larnaca (Dromolaxia): 26 plots (pending issuance of a town planning permit by the relevant EOA).

In communication with KOAG President Theseus Ioannou, we asked whether 135 plots would be sufficient, as experience with other similar projects has shown that interest is usually quite high. Mr. Ioannou replied that “there has consistently been significant demand for the acquisition of plots of land, especially when they are offered at affordable prices. We therefore expect increased interest from eligible applicants for the 135 plots we will be making available in the districts of Nicosia (Kokkinotrimithia), Limassol (Ypsonas), Larnaca (Dromolaxia), and Paphos (Timi).”

However, at this stage, there does not appear to be any possibility of expanding the plan. “The current KOAG development program includes a specific number of lots and housing units, and its implementation is already at an advanced stage. Therefore, it is not feasible to expand it immediately in order to offer a larger number of plots,” he explained.

Eligibility and Income Criteria

Plots will be allocated according to strict socioeconomic criteria, based on the existing framework implemented by KOAG. The annual income limits are set as follows:

Beneficiary Category	Maximum Annual Income
Single Individuals	Up to €30,000
Couples (without children)	Up to €50,000
Families with 1 child	Up to €55,000
Families with 2 children	Up to €60,000
Large families (5 or more members)	Up to €70,000

It is important to note that, in addition to the income criteria, applicants will be screened to ensure they do not own any other real estate. At the same time, the order in which applications are submitted will be taken into account in the evaluation process; however, this does not automatically guarantee priority if the basic requirements are not met.

Nevertheless, in order to build a home, for example, a couple must also secure a loan. In the context of these plans, the question arises as to whether there is any prior agreement between KOAG and the banks to facilitate this. Mr. Ioannou’s response is that KOAG does not interfere with the banks’ lending policies, nor is there any specific agreement within the framework of this particular plan.

“Securing the necessary financing is a matter governed by each beneficiary’s relationship with the financial institution of their choice. However, the availability of plots of land and homes at prices lower than prevailing market rates significantly reduces the amount of financing required. “This in itself is a substantial relief for young couples and families who wish to purchase their own home,” he notes.

“A Check on Speculation”

To ensure the social nature of the measure and prevent speculation in the real estate market, the KOAG is introducing a strict resale clause. Buyers will be bound by a specific time period during which they are prohibited from selling the plot on the open market.

Addressing concerns about speculation, Mr. Ioannou explained that the philosophy behind every KOAG housing project is to support households seeking to acquire a permanent residence, not to create opportunities for speculation. “Precisely for this reason, the Cyprus Land Development Organization Law includes specific provisions that prevent speculation and ensure that the CLDO’s developments serve their social purpose,” he emphasized.

Specifically, for a period of five years following the transfer of the property, significant restrictions apply regarding its sale, exchange, or any other disposition of the property, as well as regarding the creation of a mortgage or other encumbrance, with the sole exception of a mortgage securing a home loan for the property itself. Furthermore, any transfer during the same period requires the prior written consent of the KOA. These restrictions are also recorded in the Land Registry’s records and are binding on any subsequent transaction involving the property.

“This ensures that KOAG developments are utilized to meet genuine housing needs and that the benefits of housing projects accrue to the citizens for whom they are intended, rather than to thosewho are seeking short-term financial gain.”

Are there too many or too few projects?

Alongside the KOAG, various other programs run by the Ministry of the Interior are also underway, creating the impression of indirect competition. In reality, it appears that these plans are complementary.

“They are part of a broader framework of measures that make up the state’s New Housing Policy. Housing policy cannot be based on a single solution. Various plans and programs have been designed, which work in tandem and address different needs and different categories of beneficiaries,” he notes, adding “Some programs support the purchase of land or a home, others support the construction of new affordable housing by the private sector, others the construction of homes and apartments by KOAG, while others focus on affordable rentals or the utilization of existing housing stock. Together, they form a unified housing policy framework, with the common goal of increasing the available housing options and providing meaningful solutions to as many citizens as possible.”

By when

As for the timelines, the pace at which permits are issued by the newly established District Local Government Organizations (EOA) will determine the start of the plan.

As mentioned above, urban planning or building permits for the proposed properties are still pending. Therefore, the question is: Is it feasible to resolve this issue so that we are ready by 2027 (if not sooner)?

“KOAG is working systematically to ensure that all necessary permitting procedures are completed as soon as possible. We are in constant communication with the relevant authorities to expedite and finalize the review of all related applications as soon as possible. “Our goal is to adhere to the established timelines,” Mr. Ioannou replied almost laconically.

The official goal is to complete the procedures by the end of 2026, so that the submission of applications can begin in early 2027. However, if the licensing process moves at a faster pace, it is not out of the question that the first approvals could be granted as early as 2026.

Beyond this goal, for Theseus Ioannou, the completion of his second term as President of KOAG marks a time for reflection. As he himself notes, “through the collective efforts of the Board of Directors, the Executive Management, and the Organization’s staff, KOAG has substantially strengthened its role and has evolved into a key pillar in the implementation of the state’s housing policy, with projects currently underway in nearly all the districts of Cyprus.”

Expressing his gratitude to all those who contributed to this effort, he stated that “KOAG will continue with the same determination to offer practical solutions to the housing issue, for the benefit of citizens and society.”