Serviced apartments and tourist residences are no longer a simple complementary lodging option. Instead, they have become a key pillar of the Cypriot real estate market, playing a decisive role in both tourism dynamics and investment activity. According to Pavlos Loizou, CEO of Ask Wire, speaking to BnBNews.gr, the sector’s growth reflects deeper structural changes in market development as well as a new geography and distribution of demand.
Tourism demand driving the growth of serviced apartments in Cyprus
Loizou points out that the rise of serviced apartments is closely linked to the explosive increase in tourist arrivals over the last fifteen years. From 2.17 million arrivals in 2010, Cyprus reached around 4.0 million in 2025, an 80% increase. Meanwhile, hotel capacity remained almost flat, rising slightly from approximately 87,000 to 90,000 beds.
Arrivals, hotel capacity, and the role of short-term rentals in Cyprus
This supply gap was largely filled by short-term rentals, which in 2025 numbered roughly 16,000 active units, with capacity ranging from 64,000 to 80,000 beds — around 70–90% of hotel supply. This demonstrates how serviced apartments and vacation rentals have become crucial in accommodating growing tourist numbers and balancing demand across the market.
Shift of investors to organized serviced apartment projects in Cyprus
Over the past two to three years, investors — especially from Israel — have increasingly moved away from individual apartment purchases for short-term rental. Instead, they are focusing on projects designed from the outset as organized tourist complexes. These are gated communities with shared amenities, swimming pools, essential commercial spaces, and professional management.
Loizou emphasizes that these features offer more predictable returns and reduce operational risk. This trend is particularly strong in Paphos and Larnaca, where prices remain more accessible and yields are more stable.
Overall real estate market in Cyprus 2025
The performance of serviced apartments cannot be separated from Cyprus’ broader real estate market. In 2025, the market transitioned from a period of rapid growth to a more balanced phase. According to the RICS Cyprus index, apartment prices rose approximately 4.5% annually, while residential properties increased by 4.1%.
Smaller increases were recorded for warehouses and offices, while retail remained largely flat. At the same time, yields for serviced apartments hovered around 5.4%, confirming the relative resilience of this property category.
Factors behind previous growth of Cyprus serviced apartments
Loizou attributes the strong growth of recent years to two main factors:
Accumulated post-pandemic demand, when previously “frozen” housing needs emerged simultaneously in the market.
Net population inflow, with roughly 75,000 new residents arriving between 2021 and 2024, boosting both purchase and rental demand.
Serviced apartments Cyprus 2026: Shift towards supply
Looking ahead to 2026, the focus shifts toward the supply side. Projects that began in 2023 and 2024 are now nearing completion, leading to gradual rental corrections. This adjustment is more pronounced in secondary locations and older buildings, particularly in Limassol and, to a lesser extent, Nicosia.
Loizou stresses that this adjustment will not be uniform but selective, affecting mainly properties that lag in quality, location, or operational features.
Current apartment prices in Cyprus
Loizou notes that the market now shows significant differentiation. There is no single price per city; instead, there is a clear distinction between standard products and projects with quality or functional advantages.
For new two-bedroom apartments in central urban areas without sea view, asking prices are roughly:
Nicosia: €220,000–€240,000
Limassol: €300,000–€340,000
Paphos: €220,000–€260,000
Larnaca: €200,000–€220,000
Properties with shared amenities, professional management, or the “signature” of reputable developers continue to enjoy a premium. Older buildings or less attractive locations are beginning to face price pressure.
Selective corrections and resilience of organized serviced apartment projects 2026
Looking at 2026, Loizou predicts no broad market correction, but selective adjustments based on quality and location. Organized projects with professional management and a clear tourism product are expected to remain resilient.
In contrast, individual short-term rental units of lower quality face higher risks of market saturation and potential regulatory pressure, as the market moves from rapid growth to a phase of selection, where only the most organized and high-quality investments stand out.
Do you want to be among the first to learn the latest trends in the Cyprus serviced apartments market and see investment projects and strategies for 2026 up close? Book your ticket now for the Short Stay Conference Cyprus 2026 and take advantage of the 30% early bird discount!
