Cyprus Lifestyle | Property News | Tourism & Hospitality
4 years March 12, 2019
Limassol Chamber of Commerce Step in to Reduce Rental Costs
Last month, residents in Limassol were warned that due to current events in the housing sector, the price hike for rentals in the city will not be slowing down.
The recent sky-rocket of prices can be attributed to the thousands of construction workers recently requiring to be housed close to or in the city itself, in order to complete the many ventures and heavy on-going construction projects, the Limassol Chamber of Commerce & Industry informed.
The figure looks to be about 6,000 new construction jobs taken by foreign workers in Limassol alone throughout 2019, to further exacerbate an already delicate subject for many residents, the increase in island-wide rental prices. With 6 different overseas companies involved in planned development projects in Limassol over the next 2 years, an influx of foreign workers will be required, broken down approximately as follows:
- An additional team of around 2,500 will be needed for the Limassol’s casino (the City of Dreams Mediterranean).
- 800 employees such as housekeeping & reception staff to work in two new hotels.
- The construction phase which is set to begin in April will require 4,000 employees.
- Once the casino resort is fully operational in 2021, the number of permanent staff members will fall to 2,500 with a predominantly local workforce.
- Currently around 800 employees work in the existing satellite casinos in Larnaca and Nicosia and in the temporary casino in Limassol.
The new building projects are not only bringing booms and prosperity however, in addition to the new price hike from the resulting increase in demand for housing, production costs will also rise as the cost of accommodation will be covered by most construction companies.
According to the Rics Cyprus Property Price Index for 2018, the prices across Cyprus increased by the following rates so far in 2019:
- Flat rental prices increased by 18.9%.
- House prices increased by 17.7%
- Office spaces increased by 14.3%.
In November, MPs were shown data, according to which rents in Cyprus were comparable to the most expensive cities in Europe such as Paris, London and Stockholm.
Average rental prices in Limassol for a single-bedroom flat was EUR €670. In Nicosia, average rental prices were slightly lower at EUR €640.
A number of protests about the rapidly rising rental prices have accompanied the construction of a number of high-rise developments, which target the higher budgets of wealthier foreigners, while local salaries are not keeping up and local tenants this year have been left struggling to make ends meet.
How the Cyprus the Limassol Chamber of Commerce & Industry Plan to Reduce Housing Costs
To tackle the issue of high rental prices on the island, the interior ministry has agreed to adopt a proposal whereby incentives will be offered to encourage the construction of apartment buildings, available only to young couples and workers.
The permittable building area will be increased by 30%, while the minimum area required to be classified as a studio will be reduced from 70 sqm to 30 sqm, which will result in rental prices progressively lowering.
Furthermore, building owners on the island will be forbidden from selling for a period of eight years in order to prevent competition between contractors, which could also be reason for the lease price hike.