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Cyprus property prices are showing mixed signals as of September 2025, with national averages rising slightly but significant regional variations.
The market is transitioning from rapid growth to a more balanced phase, driven by strong foreign investment, increased housing supply, and new government regulations affecting taxation and short-term rentals.
If you want to go deeper, you can check our pack of documents related to the real estate market in Cyprus, based on reliable facts and data, not opinions or rumors.
Cyprus property prices rose 2% nationally in Q1 2025, but new apartment prices dropped 11% year-on-year. Foreign investment increased 15-19%, while new housing contracts surged 24.8%.
Regional differences are significant, with Paphos apartments down 20.3% but Famagusta showing increases across property types.
| Market Indicator | Current Status (Sept 2025) | Trend Direction |
|---|---|---|
| National Price Index | +2% year-on-year | Slowing growth |
| New Apartment Prices | -11% (€281,000 avg) | Declining |
| Foreign Investment | +15-19% increase | Rising |
| New Housing Supply | +24.8% contracts | Surging |
| Mortgage Rates | 4.1-5% | Stabilizing |
| Rental Yields | 4.8-6% | Slightly up |
| Tourism Impact | 64% Airbnb occupancy | Strong |
How much have Cyprus property prices changed in the last 12 months?
Cyprus property prices show a complex picture with national growth but significant regional and property type variations.
The national house price index rose by 2% year-on-year in Q1 2025, indicating overall market resilience. However, new apartment prices tell a different story, with average sale prices dropping more than 11% compared to last year, from €316,000 to €281,000.
Regional differences are particularly striking across Cyprus's major cities. Nicosia apartment prices dropped 3.8%, while Limassol apartments declined 9.4%. Paphos experienced the steepest decline at 20.3% for apartments. In contrast, Famagusta recorded increases for both property types, bucking the national trend.
House prices remained more stable than apartments, with some regions seeing increases of 3-7%. This suggests buyers are showing preference for houses over apartments in certain markets.
The price corrections mainly affect new build apartments, while established properties maintain more stable valuations across most regions.
What are the official forecasts for Cyprus property prices over the next 1 to 3 years?
Official forecasts and analyst predictions point to continued but slower price growth through 2027.
Most analysts and major banks expect moderate price growth of 5-10% for 2025, representing a significant slowdown from previous years. The Cyprus property market is entering what experts describe as a "cooling" or "balanced" phase after experiencing sharp growth in 2022 and 2023.
For 2026 and 2027, forecasts become more conservative with single-digit price increases expected. This moderation reflects increasing housing supply catching up with demand and foreign investment demand reaching a plateau.
The consensus among real estate professionals is that the rapid price appreciation of recent years is unlikely to continue at the same pace. Instead, the market is transitioning toward more sustainable growth patterns that better align with local income levels and economic fundamentals.
It's something we develop in our Cyprus property pack.
How many new housing units are being built in Cyprus compared to last year?
New housing construction in Cyprus has surged dramatically, with contracts for new homes increasing by 24.8% year-on-year in Q1 2025.
More than 1,368 contracts were signed for new homes in the first quarter of 2025, showing strong developer confidence and buyer demand for modern properties. Apartment construction contracts rose 22.7%, while house construction contracts increased even more substantially by 34.9%.
This construction boom represents the highest level of new build activity Cyprus has seen in several years. Developers are responding to shifting buyer preferences toward energy-efficient homes and modern amenities that older properties often lack.
The surge in new housing supply is particularly concentrated in areas with strong foreign investor interest, including Limassol, Paphos, and select locations in Nicosia. This increased supply helps explain the price corrections seen in new apartment segments across various regions.
Local construction activity is at multi-year highs, indicating developers expect continued demand despite price adjustments in certain segments.
Is foreign investment in Cyprus real estate increasing or decreasing this year?
Foreign investment in Cyprus real estate is definitively increasing, with overseas buyer transactions up 15-19% year-on-year in 2025.
The growth is driven by continued EU residency incentives and strong interest from specific international buyer groups. Non-EU buyers, particularly from Israel, Lebanon, and the UK, represent the largest segments of foreign investment activity.
Paphos and Limassol continue to attract the highest levels of foreign investment, with these coastal cities offering both lifestyle benefits and rental income potential. Foreign buyers are increasingly focusing on mid-range properties rather than ultra-luxury segments, indicating a shift toward more practical investment approaches.
The sustained foreign investment levels occur despite higher mortgage rates and new tax regulations, suggesting underlying demand remains robust. EU residency programs continue to motivate many purchases, though buyers are becoming more price-conscious in their selections.
Cyprus's Golden Visa program and favorable tax treatment for non-residents continue to drive investment flows, though new regulations are making buyers more selective about property types and locations.
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What is the current level of demand from local buyers compared to expats and investors?
Both local and foreign demand remain strong in Cyprus, but buyer preferences are shifting toward more affordable properties across both groups.
Local Cypriot buyers are increasingly seeking budget-friendly homes as mortgage rates have risen to 4.1-5% from around 2% in 2021. This has pushed many local buyers toward smaller apartments or properties in less expensive areas like Larnaca and parts of Nicosia.
Foreign buyers and expats continue showing strong interest but are also becoming more price-conscious. Rather than focusing exclusively on luxury properties, international buyers are increasingly targeting mid-range units that offer better value and rental income potential.
Nicosia and Larnaca see the strongest local buyer activity due to more affordable pricing and proximity to employment centers. Limassol and Paphos remain dominated by expat and investor purchases, though these buyers are becoming more selective about specific locations and property types.
The shift toward affordability affects both groups, creating increased competition in the mid-market segment while luxury properties experience longer selling times and more price negotiations.
How have mortgage interest rates in Cyprus changed recently, and will they rise further?
Mortgage interest rates in Cyprus have increased sharply, currently ranging from 4.1% to 5% as of 2025, reflecting European Central Bank rate hikes.
This represents a significant increase from the approximately 2% rates available in 2021, more than doubling borrowing costs for property purchases. The rate increases directly follow ECB monetary policy changes designed to combat inflation across the eurozone.
Most analysts expect mortgage rates to stabilize at current levels rather than increase substantially further. The ECB is showing signs of reaching peak rates in its current tightening cycle, suggesting Cyprus mortgage rates may have reached their near-term ceiling.
However, further minor increases remain possible if European inflation pressures persist or geopolitical factors affect monetary policy. Banks in Cyprus are also being more selective about lending, requiring larger down payments and stricter income verification than in previous years.
The higher rates are affecting buyer behavior, with many opting for shorter loan terms or seeking properties in lower price ranges to manage monthly payments effectively.
What percentage of listed properties in Cyprus are selling below asking price right now?
While specific data on the exact percentage of properties selling below asking price is limited, market indicators suggest increased price negotiations, particularly in the new build apartment segment.
The 11% price correction in new apartment averages indicates a significant trend toward properties selling below initial asking prices in this segment. Price reductions are most common for new developments that were launched at peak pricing levels in 2023 and early 2024.
Properties in Paphos show the highest likelihood of selling below asking price, with apartment prices down 20.3% year-on-year suggesting substantial negotiation is occurring. Limassol and Nicosia also show evidence of increased buyer negotiating power in certain property types.
Despite price corrections in some segments, overall transaction volume remains strong, indicating buyers and sellers are finding agreeable pricing through negotiation rather than properties sitting unsold.
The trend toward selling below asking price is most pronounced for properties priced above €400,000, while more affordable units continue selling closer to listing prices due to stronger demand competition.
How long does it currently take to sell an average property in Cyprus compared to last year?
Properties in Cyprus are actually selling faster in 2025 compared to 2024, particularly new build properties, despite some price corrections in certain segments.
| Property Type | Average Days on Market 2024 | Average Days on Market 2025 |
|---|---|---|
| New Build Apartments | 45-60 days | 30-45 days |
| Existing Apartments | 60-90 days | 50-75 days |
| New Build Houses | 90-120 days | 75-100 days |
| Existing Houses | 120-180 days | 100-150 days |
| Luxury Properties (€500k+) | 180-300 days | 200-350 days |
The surge in both transaction volume and selling speed is particularly evident in Limassol, Nicosia, and Larnaca. New builds are moving especially quickly due to buyer preference for modern, energy-efficient properties and developer incentives.
Faster selling times occur despite higher mortgage rates, indicating strong underlying demand is absorbing available inventory efficiently. Properties priced competitively for current market conditions sell within 30-60 days in most areas.
It's something we develop in our Cyprus property pack.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Cyprus versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What are the rental yields across different Cypriot cities, and are they trending up or down?
Rental yields in Cyprus remain attractive compared to other Mediterranean markets, with the national average gross rental yield ranging from 4.77% to 5.1% as of Q1-Q3 2025.
| City | Gross Rental Yield Range | Trend Direction |
|---|---|---|
| Limassol | 5.3% - 6.0% | Slightly increasing |
| Larnaca | 5.0% - 6.0% | Stable to increasing |
| Nicosia | 4.8% - 5.6% | Stable |
| Paphos | 4.2% - 4.8% | Increasing due to price corrections |
| Ayia Napa/Protaras | 5.5% - 7.0% | Seasonal variation, trending up |
Rental yields are trending slightly upward across most cities due to a combination of higher rental rates and stable or correcting property prices. This trend is particularly pronounced in cities with growing short-term rental demand driven by tourism recovery.
Limassol offers the most consistent high yields due to strong business district demand and proximity to major employers. Larnaca benefits from airport proximity and growing expatriate populations working in Nicosia but preferring coastal living.
Paphos yields are improving as property price corrections make purchases more affordable while rental demand remains steady from both long-term residents and short-term tourists.
Are there any new government policies or tax changes likely to affect property prices in Cyprus soon?
Several significant government policy changes are already affecting the Cyprus property market, with more modifications expected through 2025 and 2026.
- Reduced 5% VAT restrictions: From June 2025, stricter rules apply to the reduced VAT rate for primary home purchases. Properties used for investment or rental no longer qualify, and new requirements include maximum property size limits, price caps, 10-year residency requirements, and stricter repayment obligations if conditions are breached.
- Standard VAT increase: New homes not meeting the reduced VAT criteria now face 19% VAT instead of 5%, significantly increasing costs for investors and second-home buyers.
- Corporate tax alignment: Corporate tax rates are rising from 12.5% to 15% in 2025 to align with OECD minimum tax rules, though this has minimal impact on individual property buyers.
- Short-term rental regulations: New legislation requires official registration of all short-term rentals with stricter oversight and tax compliance requirements for income earned from Airbnb and similar platforms.
- Enhanced tax enforcement: Authorities are implementing tighter rules on tax compliance for rental income and capital gains from property sales.
These policy changes are designed to cool speculative investment while supporting genuine residents, potentially affecting property demand and pricing structures across different buyer segments.
What is happening with tourism numbers in Cyprus, and how does that impact short-term rental demand?
Cyprus tourism is experiencing record-breaking performance, with visitor arrivals increasing 26.4% in 2023 and a further 4.2% rise in 2024, creating strong demand for short-term rental properties.
Airbnb occupancy rates are running at approximately 64%, indicating robust demand for vacation rental properties across the island. This high occupancy supports property investment returns for owners targeting the short-term rental market.
The tourism boom is particularly benefiting coastal areas like Paphos, Limassol, Ayia Napa, and Protaras, where vacation rental properties can achieve premium rates during peak seasons. Properties near beaches, resorts, and major attractions see the strongest rental demand and highest occupancy rates.
However, authorities are implementing tighter regulation of short-term rentals, requiring official registration and stricter tax oversight. These new rules may affect profitability margins but also help legitimize the sector and reduce unfair competition.
The strong tourism performance supports buy-to-let property investment strategies, particularly for properties designed or renovated specifically for vacation rental use. Tourist demand continues to drive rental rate increases in prime vacation areas.
How do Cyprus property prices compare right now to similar Mediterranean markets like Greece, Malta, or Spain?
Cyprus offers generally lower property prices per square meter and higher rental yields compared to most similar Mediterranean markets as of September 2025.
| Country | Avg. City Apartment Price/m² | Rental Yield Range | 2025 Market Trend |
|---|---|---|---|
| Cyprus | €2,500 - €2,700 | 4.8% - 6.0% | Slowing price growth, strong sales volume |
| Greece | €2,800 - €3,600 (Athens peak) | 3.5% - 5.5% | Prices rising, Athens market surging |
| Malta | €3,300 - €4,000 | 3.0% - 5.0% | Stable with modest growth |
| Spain | €3,000 - €6,000 (Madrid/Barcelona) | 3.0% - 5.5% | Prices rising, rental yields steady |
Cyprus consistently offers better value per square meter than Malta or major Spanish cities, with prices roughly comparable to Greece outside of Athens. The island's rental yields are generally higher than competing Mediterranean destinations, making it attractive for buy-to-let investors.
The Cyprus market benefits from EU membership, English-language accessibility, and favorable tax treatment compared to some alternatives. However, Greece's recent golden visa changes and Spain's rental market restrictions have shifted some investor attention toward Cyprus.
It's something we develop in our Cyprus property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Cyprus property prices are unlikely to drop significantly in the near term, with most indicators pointing to continued modest growth despite some regional corrections.
The market is transitioning to a more balanced phase with sustainable growth rates of 5-10% annually, supported by strong foreign investment, tourism demand, and new housing supply meeting evolving buyer preferences.