Panayiotis Rougalas
The government unveiled a plan a month ago aimed at boosting the purchasing power of young people to meet their housing needs. The plan provides financial assistance to young couples — with or without children — single-parent families, and single individuals up to 41 years old looking to acquire their first home. This is excellent news.
The maximum financial assistance for a single person is €20,000. For a family without children, the maximum is €45,000, while for a family with children (including single-parent families), the aid goes up to €50,000. The maximum amount of assistance varies depending on the family structure. Additionally, there’s an extra allowance of up to €10,000 for people with disabilities.
can someone on a €25,000 gross income afford to pay rent while saving enough for a down payment of 25-30% of a property’s value, as required by Cypriot banks for a home loan?
So far, so good. Let’s continue. Under this plan, acquiring a home can be achieved through various means: constructing a house, purchasing a new or existing property, purchasing and improving a home, receiving a property as a gift and improving it, or acquiring and improving a home through other legal avenues.
Now, let’s delve into the financial details that matter. A single person can have a maximum gross family income of €25,000. For a couple or a single-parent family of two, the limit is €45,000. For a family of three (including single-parent families), the maximum gross income is €50,000. For a family of four, it’s €55,000, and for families of five or more, the cap is €65,000.
But here’s the question: Does the state seriously believe that a single person earning up to €25,000 gross annually — who is clearly not defrauding the system — can realistically manage a mortgage payment? In other words, can someone on a €25,000 gross income afford to pay rent while saving enough for a down payment of 25-30% of a property’s value, as required by Cypriot banks for a home loan? The same questions apply to other categories. In Nicosia, where rent is at least €800 per month, or Limassol, where it starts at €1,100, the math simply doesn’t add up. And let’s not forget — these figures refer to gross income, not net.
It seems clear that this financial assistance is aimed at single people, couples, or families who already receive support from their parents. These are individuals who don’t pay rent because they live with family or in family-owned property. As the saying goes, they are “eating and drinking at home.” These individuals already have support, and the down payment they need to borrow from a bank will likely come from family resources.
For anyone living in Cyprus in 2024, relying solely on their own income — whether single, partnered, or raising children — these figures are plainly unrealistic and need to be reconsidered. The key phrase in the government’s plan, in my opinion, is “to acquire a home as a gift."
[This op-ed was translated from its Greek original]
