As Cyprus moves closer to 2026, the property market is once again at the centre of public debate — not only as an investment asset, but also as a major social issue. Buyers, sellers and tenants are trying to decode the direction of a market that has remained on a steady upward trajectory in recent years, placing increasing pressure on household incomes.
What is happening in Europe — and Cyprus’ role
The housing challenge has become a pan-European issue. Across the European Union, residential property prices have risen by more than 60% between 2013 and 2024, far outpacing income growth. Rents have also increased sharply, while new housing construction continues to fall short of actual demand. According to European Commission estimates, Europe needs more than two million new homes per year, compared to around 1.6 million currently being built — creating a persistent structural supply gap.
Within this broader European context, Cyprus has its own distinct characteristics. In 2025, the property market continues to demonstrate resilience, with both sales prices and rents on an upward trend. Rising construction costs, limited availability of land in urban areas and strong demand from foreign investors and companies — particularly in the technology and tourism sectors — are keeping prices elevated.
Where property prices and rents stand
Limassol remains, by far, the most expensive city in Cyprus. Average apartment prices have reached €5,553 per square metre, with many residential transactions exceeding €600,000. The city continues to attract high-income foreign buyers, intensifying competition with domestic demand. Paphos follows, with average prices close to €4,733 per square metre, driven by tourism-related demand and interest in holiday and investment properties.
At the other end of the spectrum, Nicosia remains the most affordable market for Cypriot buyers, with average apartment prices of approximately €2,939 per square metre. Larnaca, however, is emerging as a rising force in the property market. Prices are currently around €3,867 per square metre, supported by major developments at the port and marina, as well as significant infrastructure upgrades.
Even greater pressure is evident in the rental market. In Limassol, monthly rents for a one-bedroom apartment range from €950 to as high as €1,700, making the city increasingly inaccessible for low- and middle-income households. In Nicosia and Larnaca, rents typically range between €600 and €1,100, with demand driven by students, young couples and professionals relocating to urban centres. At the same time, rental yields remain attractive, with average annual apartment returns at around 5.4%, continuing to draw investment capital.
Data from the Central Bank of Cyprus show that demand in the property market remained strong in the third quarter of 2025. Ongoing credit expansion in mortgage lending, combined with the gradual easing of interest rates for new loans, is providing further support. Land Registry figures also point to increased transaction activity.
Cyprus property market forecast 2026
Forecasts for 2026 point to continued economic growth, sufficient to sustain demand for residential property, albeit with a clear shift in preferences. Cypriot buyers are increasingly focusing on more affordable solutions, mainly smaller apartments, while foreign demand for luxury properties remains present but shows signs of moderation.
In terms of pricing, the prevailing view is that values will remain broadly in line with 2025 levels or record mild increases in high-demand areas such as Limassol and Larnaca. A generalised price correction does not appear likely.
The imbalance between supply and demand remains a decisive factor. The shortage of new housing, combined with high construction and land costs, continues to support elevated prices. Market participants stress that meaningful progress will require close cooperation between the public and private sectors.
In this direction, the Cypriot government has announced plans to develop 500 housing units in Nicosia, Limassol, Larnaca and Paphos on state-owned land, with a total budget of approximately €70 million, excluding land value. These homes will be offered at affordable rents to families and individuals based on social and income criteria, with a particular focus on younger generations. In parallel, collective housing projects for workers in tourism, industry and commerce are being promoted, aiming to ease housing pressure on these groups.
Overall, the outlook for 2026 is that of a market that remains resilient but socially strained. Property prices are unlikely to decline significantly without a substantial increase in supply, while government measures — although moving in the right direction — will need to prove their effectiveness in practice.
