A good effort by the Cyprus Land Development Organisation (ΚΟΑG) to offer properties for rent (residential) at affordable levels. The announcement by this organisation and Limassol municipality to help lower income groups face in paying rent is noteworthy, although the supply to be provided is not enough to address the problem.
In addition to the above effort, we had previously suggested our own thoughts on the matter and we expand our suggestions today.
No matter how good KOAG’s effort is to help by offering in two to three years new units for this purpose, it is impossible to satisfy the demand both numerically and in terms of location immediately.
The management of common expenses by the KOAG is a good suggestion, as non-payment and tenant misconduct/illegalities, is a serious “curse” in dysfunctional tenancies and is one of the main reasons deterring interested income seeking buyers.
Public sector developments need large-scale developments in various areas, otherwise this may result in ghettoisation.
The private sector could, however, help in the above effort and this should also include individual units wherever they are located. Why should the existing owners not offer their units for rent if they know that collecting rents will be certain?
The determination of affordable rent can be based on a percentage of 2-3 per cent on the market value and/or the determination of rents by area/quality based on a pre-existing rent list of the area.
The purchase of a rental unit subject to VAT should have the VAT reduced from 19 to 5 per cent.
Immediate eviction for non-payment of rent/compliance with rental conditions within e.g. period of three months from non-compliance with the tenant’s obligations. There is now some progress for statutory tenants only, but what about the others?
Minimum rental period of at least three years with an annual inspection by the owner/ΚΟΑG for the condition of the property.
Terms of the rental contract to stipulate that the owner must cover insurance and maintenance other than natural wear and tear.
In the case of a purchase with VAT reduced to 5 per cent, the buyer/owner to be able to sell the unit after the eight-ten year period and if before, return the proportion of the saving to the state.
Units that will be offered for rent at an affordable level either as a project and/or as an individual unit, to be automatically entitled to be extended by 10-15 per cent, with immediate issuance of a title deed.
KOAG has a very important role to play in this whole approach, whether it is their own project, or from third party owners.
Of course, the issue is not going to be solved in its entirety, but the above is a start and with the involvement of the private sector and the increased supply that will be immediate. The time is very suitable for this type of investment, especially when you take into account negative interest rates, the numerous problems that exist with rentals (problems that will be taken over by the ΚΟΑG), while the various subsidies received by (single) parents are likely to take advantage of the system.
We have concluded that a solution exists (for the above and other issues), that of the creation of a deputy ministry of the interior along the lines of the deputy tourism ministry and shipping ministry, offering new people who are non-politically anchored and with an appetite for work, who can boldly provide solutions to chronic issues that remain unsolved for years.
You will notice, our dear readers, those who have at least been following us during our 42 years of journalism, that in recent years we have expressed our displeasure about issues in the construction industry that the respective governments and especially the Ministry of the Interior barely understand and even less act accordingly to deal with the poor or improve the functioning of the real estate market.
In our most recent publications on the issue concerning student residences (one year ago), on the issue of common users (comments on the new bill), the Mafia of some local authorities to cover up illegalities, issues concerning the issuance of certificates and intimidated applicants, the inactivity of the ETEK, the upgrading of green areas etc, etc are just some of the issues that a deputy ministry should be able to examine.
This article is republished from the Cyprus Mail website ( https://cyprus-mail.com/2022/09/05/solutions-to-the-rent-problem/ )
