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What is happening in Cyprus’s real estate market? Are prices going up or down? Is Limassol still a hotspot for foreign investors? How is Cyprus’s government impacting real estate policies and taxes in 2025?
These are the questions everyone is asking us every day—professionals, buyers, and sellers alike, from Nicosia to Paphos and beyond. Perhaps you’re wondering the same thing.
We know this because we stay deeply connected with local professionals and people like you, diving into the Cypriot real estate market every single day. That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market trends and dynamics.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
How this content was created 🔎📝
Fact-checked and reviewed by our local expert
Laurence Rapp 🇬🇧
Sales representative at Spot Blue - International Real Estate Agency
1) Cyprus will experience moderate price increases as demand exceeds supply
In 2023, Cyprus saw a 40% jump in real estate transactions compared to the previous year.
This boom, with 25,400 transactions totaling €5.6 billion, shows a strong appetite for homes. Foreign buyers, especially those from outside the EU, are a big part of this, making up one-third of all property sales by August 2023. Their interest is particularly high in luxury areas, pushing prices up.
On the flip side, new housing isn't keeping up. The number of residential building permits dropped by 7.1% in the first eight months of 2023. Rising construction costs and delays are making it tough to build new homes, which only adds to the demand-supply gap.
Experts and consumer surveys agree that this trend will likely continue into 2024. With demand still outpacing supply, property prices are expected to rise moderately. This means if you're looking to buy, acting sooner might be wise.
For those eyeing the market, it's worth noting that the current landscape favors sellers. The limited supply and high demand create a competitive environment, especially in sought-after areas.
So, if you're considering a move to Cyprus, keep an eye on these trends. The market dynamics suggest that waiting might cost you more as prices inch upward.
Sources: The Luxury Playbook, Cyprus Mail, WTCA
2) Coastal rental yields will increase with rising tourism and short-term rental demand
Cyprus is experiencing a tourism boom in 2023 and 2024.
With more visitors flocking to the island, especially from the UK, Israel, and Germany, tourist numbers have jumped by 20.1% in 2023. This influx is particularly noticeable in coastal hotspots like Limassol and Paphos, where tourists love to stay.
These areas are seeing higher occupancy rates as more travelers opt for short-term rentals. The charm of these coastal towns, with their beautiful beaches and exciting nightlife, makes them a top choice for vacationers.
Globally, short-term vacation rentals are becoming more popular, thanks to the ease of booking through mobile apps. In Cyprus, this trend is evident as rental yields in coastal areas are climbing, with Limassol and Paphos leading the charge.
Investors are taking note, as the demand for short-term rentals is pushing up rental returns. The convenience and flexibility of these rentals are appealing to both tourists and property owners.
As tourism continues to rise, coastal rental yields are expected to grow, making it an attractive opportunity for property buyers. The combination of increased tourist arrivals and the popularity of short-term rentals is a win-win for investors.
Sources: Tourism Statistics 2023, Short Term Vacation Rental Market 2024-2028, Cyprus's Residential Property Market Analysis 2024
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.
3) Investors will focus on rural Cyprus for agritourism and sustainable living opportunities
Rural areas in Cyprus are catching the eye of investors interested in agritourism and sustainable living.
With the world leaning towards eco-friendly travel, Cyprus is no exception. The island is seeing a surge in consumer interest for authentic rural experiences. People are eager to explore farm-to-table dining, culinary tourism, and even farm stays. The government is on board too, actively promoting these activities to breathe new life into rural economies and keep cultural traditions alive.
Backing this trend, the European Agricultural Fund for Rural Development is pouring funds into Cyprus. This financial boost is part of a strategic plan by the Ministry of Agriculture, Rural Development, and Environment. The aim? To encourage investments in primary production and rural areas, making it a hot spot for those keen on sustainable projects.
Investors are noticing the potential in Cyprus's countryside. The agritourism market is on the rise, with a projected growth rate of 13.4% annually from 2022 to 2030. This reflects a broader shift towards sustainable and eco-friendly practices, making it an exciting time for those looking to invest in this sector.
Cyprus offers a unique blend of experiences that cater to diverse interests. Whether it's educational tours or culinary adventures, there's something for everyone. This variety is a key factor in attracting tourists and investors alike, eager to experience and invest in the island's rural charm.
With substantial funding and government support, Cyprus is well-positioned to become a leader in agritourism. The focus on sustainable living and rural development is not just a trend but a strategic move to revitalize rural areas and preserve cultural heritage.
Sources: PeekPro, EU Funds Cyprus
4) Asian investors will increasingly target Cyprus for diversification in European real estate markets
Asian investors are increasingly eyeing Cyprus as a prime spot for diversifying their European real estate portfolios.
One reason for this surge in interest is the growing presence of Asian investors at European property events. Take the LPS Shanghai 2024, for example, which is a major luxury property exhibition. It drew in over 12,200 VIPs from more than 50 countries, including Europe. This event put Cyprus in the spotlight as a top choice for high-net-worth individuals, especially in the luxury real estate market.
Asian real estate firms are also expanding their reach into Europe, which highlights this trend. Temasek, a well-known Singaporean sovereign wealth fund, is a case in point. They've been building up their investment team in Europe and even opened a new office in Paris. This move is part of a larger trend where Asian institutional investors are diversifying with European assets, and Cyprus stands to gain from this shift.
Cyprus offers favorable economic and tax conditions that make it a magnet for foreign investors. Compared to other European countries, Cyprus has maintained a high structural primary balance, averaging 3.5% of GDP since the 2013 crisis. This stability makes it an attractive and lucrative investment environment.
For Asian investors, Cyprus is not just about numbers; it's about strategic positioning. The island's location offers a gateway to both Europe and the Middle East, making it a strategic hub for business and investment. This geographical advantage is another reason why Asian investors find Cyprus appealing.
With its blend of economic stability, strategic location, and appealing tax conditions, Cyprus is becoming a hotspot for Asian investors looking to diversify. The trend is clear: Asian interest in Cyprus is on the rise, and the island is well-positioned to benefit from this growing attention.
Sources: LPS Shanghai 2024, Asian Investor, IMF eLibrary
5) Suburban rental yields will dip slightly as more people choose homeownership in these areas
In Cyprus, more people are buying homes in suburban areas instead of renting.
This shift is largely due to better mortgage options and favorable interest rates, making it easier for people to own homes. The government has sweetened the deal with incentives like reduced VAT rates and tax exemptions for first-time buyers, which makes buying a home more appealing than renting.
In places like Limassol, the real estate market is buzzing with activity. Sales in suburban areas are on the rise, showing a clear preference for owning over renting. This trend is causing a dip in rental demand, which means rental yields are starting to decline.
As more people opt to buy, the number of rental applications is naturally dropping. This shift is not just a blip; it's a sign of changing times in the housing market. With fewer people renting, landlords are seeing slightly lower returns on their rental properties.
For those considering buying a property in Cyprus, now might be a good time to jump in. The combination of government incentives and a bustling real estate market makes homeownership an attractive option. Suburban areas are particularly popular, offering a blend of community feel and investment potential.
Sources: Trading Economics, ARES Properties, The Luxury Playbook
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6) Urban rental yields will rise as young professionals flock to cities for work opportunities
Rental yields in urban centers are on the rise as young professionals flock to cities for job opportunities.
In 2023, rental prices in Cyprus jumped by 18.57% compared to the previous year. This surge was even more noticeable in Limassol, where apartment rents shot up by 25.3% and house rents increased by 24%. The buzz around city living is real, and it's not just about the numbers.
Cyprus is experiencing economic growth, with GDP expected to climb from 2.4% in 2023 to 3% by 2025. This economic boost is creating more jobs in urban areas, making cities like Nicosia and Limassol hotspots for young professionals. The development of business hubs in these cities is a magnet for this demographic, pushing rental demand even higher.
Buying a home in the city is becoming pricier, making renting a more appealing choice. As property prices rise, more young professionals are choosing to rent, which in turn is driving up rental yields. Government investments in urban infrastructure and the abundance of amenities and services in cities are making city life even more attractive.
With the cost of home ownership climbing, renting is becoming the go-to option for many. This shift is contributing to higher rental yields, as more young professionals opt for the flexibility and convenience of renting. The appeal of city living is undeniable, with its vibrant lifestyle and career opportunities.
Sources: Global Property Guide, Chambers Practice Guides
7) New tax incentives for first-time buyers will boost demand in the affordable housing market
In Cyprus, property sales have surged, especially among first-time buyers.
In 2022, there was a 29.6% increase in property sales, and this momentum carried into 2023 with a further 19% rise in the first ten months. This trend highlights a growing interest in homeownership, particularly in the affordable housing sector.
The government has been instrumental in this shift by offering generous tax incentives and subsidies to first-time buyers. Young families, for example, can benefit from a one-time grant ranging from €20,000 to €50,000, depending on their income and family size. These financial aids are making it easier for first-time buyers to step into the housing market, thereby boosting demand.
Real estate market analysis shows a clear move towards affordable housing, largely driven by these government initiatives and favorable taxation policies. The 'build to rent' scheme and revised urban incentives are also playing a role in increasing the affordable housing stock, making it more accessible for first-time buyers.
Insider knowledge suggests that these new tax incentives are not just a temporary boost but are expected to stimulate long-term demand in the affordable housing market. This is particularly appealing to young families and individuals looking to invest in their first home.
With these changes, the landscape of the Cypriot real estate market is evolving, offering more opportunities for those looking to buy their first property. The combination of government support and market trends is creating a favorable environment for new buyers.
Sources: Global Property Guide, Cyprus Mail, KPMG Cyprus Real Estate Report
8) Updated property tax laws will encourage investment in energy-efficient homes
Cyprus is making it easier to invest in energy-efficient homes with new property tax laws.
The government has introduced tax exemptions and capital deductions to make energy-saving upgrades more appealing. For example, a recent bill approved by the Cypriot Cabinet allows homeowners to enjoy a higher capital deduction rate of 7% for energy efficiency improvements, up from the previous 3%. This means more savings for those upgrading their homes.
There's also a 20% capital allowance for machinery and equipment related to renewable energy systems. This is a big help for homeowners looking to cut costs while making their homes greener. These financial incentives are designed to ease the burden of initial investments in energy-efficient technologies.
The Ministry of Energy, Trade, Industry, and Tourism has rolled out the Energy Saving and Modernization of Houses Program. With a budget of €30 million for its third phase, this program offers substantial subsidies for energy-efficient upgrades. Depending on the property type and energy savings achieved, homeowners can receive sponsorships ranging from €7,775 to €32,000.
These incentives not only lower the upfront costs but also promise long-term savings on energy bills. The program is a win-win, making it financially viable to invest in energy efficiency while reducing overall energy consumption.
Sources: Cyprus Mail, Dom.com.cy, Regfollower
We have made this infographic to give you a quick and clear snapshot of the property market in Cyprus. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Affordable housing prices will stay stable as government initiatives boost supply
The Cyprus government is working hard to keep affordable housing prices stable.
They've introduced a new policy that gives landowners a 45% increase in building factors for larger plots, but only if they reserve some of it for affordable homes. This is a smart move to encourage more affordable housing development.
Even though there was a slight drop in residential building permits in 2023, the number of homes approved actually went up. This shows a strong focus on boosting housing supply, which is key to keeping prices steady. The government is also offering urban planning incentives, giving developers more ways to use extra building factors and create new housing projects.
The Cyprus Land Development Corporation is playing a big role in this effort. They're planning and funding projects like the ARP 1 in Limassol, which is getting significant state funding and should be done by 2028. These projects, along with tax breaks and partnerships with private developers, aim to increase the number of affordable homes available.
These initiatives are part of a broader strategy to ensure that affordable housing remains accessible to more people. By working with private developers and offering incentives, the government is making it easier to build affordable homes.
With these efforts, the government is not just stabilizing prices but also expanding housing options for potential buyers. This is good news for anyone looking to buy property in Cyprus.
Sources: Kathimerini Cyprus, Government of Cyprus, Chambers Practice Guides
10) Foreign buyers will keep boosting demand in the luxury market, especially in Limassol and Paphos
Foreign buyers are still very interested in Cyprus, especially in the luxury markets of Limassol and Paphos.
Limassol is buzzing with activity, seeing a 13% jump in property transactions from January to September 2024 compared to last year. This city is a hot spot thanks to its lively atmosphere and prime location.
Paphos is catching eyes too, with 185 property deals in September 2024 alone. Its beautiful coastline and rising sales make it a top choice for luxury seekers.
Cyprus is a magnet for foreign buyers because of its great quality of life, safety, and sunny Mediterranean weather. Being part of the EU and sitting at a crossroads of three continents adds to its appeal for both living and investing.
The Cyprus Golden Visa program sweetens the deal, offering a path to permanent residency through property investment. Add in reduced VAT rates for first-time buyers, and you've got a recipe for attracting foreign investors.
Non-EU nationals are particularly keen, snapping up 335 properties in August 2024 in Limassol and Paphos. This shows a strong and ongoing interest from this group.
Cyprus' Mediterranean charm keeps pulling in international real estate investors, with its tourism-related real estate and infrastructure being big draws. The booming hospitality industry only boosts Cyprus' status as a luxury destination.
Sources: La Maison Estates, Kredium, Global Citizen Solutions, Cyprus Profile, Dom.com.cy
11) Young professionals will boost demand for modern, tech-enabled apartments in cities
Young professionals are flocking to urban areas in Cyprus, drawn by promising job prospects.
In 2023, Cyprus boasted an impressive employment rate of 78.9%, attracting many young professionals to its cities. This influx is largely due to the abundance of job opportunities, especially in sectors like technology and finance, which are thriving in urban settings.
Modern living demands are also shaping this trend. Young professionals are increasingly seeking high-speed internet and smart home features in their apartments. Across Europe, there's a push for better tech and energy infrastructure, and Cyprus is no exception. This means that properties with these amenities are in high demand.
Real estate reports highlight a clear preference for urban apartment living among young professionals. They crave convenience, connectivity, and modern design, which are often found in city apartments. The tech industry's growth and the rise of remote work have made urban areas even more appealing, especially in Cyprus.
In Cyprus, there's a strong demand for skilled workers in STEM fields, further driving young professionals to urban centers. This demand is not just about jobs; it's about the lifestyle that cities offer, with their vibrant culture and social opportunities.
As cities continue to evolve, the need for modern, tech-enabled apartments will only grow. Young professionals are at the forefront of this demand, seeking spaces that match their dynamic lifestyles and professional needs.
Sources: Economy Finance, PwC Emerging Trends
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12) Interest in properties with outdoor spaces and recreational facilities will grow due to health and wellness trends
In 2023 and 2024, there's been a noticeable shift towards valuing health and wellness in living spaces.
People are now looking for homes with gardens or balconies because outdoor living offers a peaceful and natural ambiance. Take Alma Villas in Protaras, for example, where the large gardens and roof gardens are a big hit. Residents love the tranquility and connection to nature these spaces provide.
Homes near parks or nature reserves are also seeing a surge in sales. The Solmaris Villas project in Cavo Greco National Park is a prime example, attracting buyers who prioritize natural beauty and outdoor living. Consumer surveys back this up, showing a strong preference for homes with outdoor amenities.
Developers are catching on, increasing the development of recreational facilities in residential areas. Projects like Green Valley Kalavasos in Larnaca, with shared pools and landscaped gardens, are popping up to meet the demand. This trend is driven by people seeking a high quality of life and outdoor recreational activities.
The wellness real estate market is on the rise, expected to grow rapidly through 2025. This growth is fueled by a growing awareness of how the built environment impacts health. People are increasingly interested in properties that offer access to outdoor spaces and recreational facilities.
As more people recognize the benefits of outdoor living, the demand for such properties will likely continue to rise. This shift is not just a trend but a reflection of a broader movement towards integrating wellness into everyday living.
Sources: Alma Villas, Protaras, Solmaris Villas, Cavo Greco National Park, Global Wellness Institute
13) Interest in large multi-family homes will drop as smaller, low-maintenance properties gain popularity
In Cyprus, people are shifting towards smaller, low-maintenance homes.
Over the years, the average household size in Cyprus has been shrinking. Back in 2011, it was 2.76, but by 2021, it had dropped to 2.57. This trend is even more pronounced in urban areas, where families are getting smaller. As a result, the demand for large, multi-family homes is decreasing.
There's a growing interest in smaller, more affordable homes. This is largely due to demographic changes, like an aging population and smaller family sizes. People want homes that are easier to manage, and smaller properties fit the bill perfectly. The real estate market is catching on, with more construction of these types of homes to meet the needs of both locals and foreigners.
Environmental concerns are also influencing this shift. With climate risks on the rise, there's a push for sustainable living. Many are now looking for homes that are not just smaller but also eco-friendly and resilient. Urban regeneration projects in Cyprus are making cities greener, which is making city living and smaller homes more appealing.
These projects aim to enhance urban areas, making them more attractive and sustainable. This aligns with the growing preference for smaller homes, as people seek out properties that offer both convenience and environmental benefits. City living is becoming more desirable as these changes take place.
Overall, the combination of demographic shifts, environmental awareness, and urban improvements is driving the trend towards smaller homes. Large, multi-family homes are losing their appeal as people prioritize ease of maintenance and sustainability.
Sources: Government of Cyprus, Cyprus Mail, European Investment Bank
14) Cyprus will see rising demand for retirement-friendly properties due to its aging population
In Cyprus, the aging population is becoming more prominent.
Back in 2021, 17.2% of the population was aged 65 or over, up from 13.3% in 2011. This shift means more people are reaching retirement age, and it's not just about numbers; it's about lifestyle changes and needs. Imagine more folks looking for homes that cater to their golden years, with easy access to healthcare and community activities.
People in Cyprus are living longer too. By 2050, men might live up to 84 years and women up to 87 years. This means more years spent in retirement, which naturally increases the demand for homes that suit this stage of life. Think about properties with fewer stairs, more social spaces, and maybe even a garden to enjoy those extra years.
The 2024 Ageing Report for Cyprus points out a rising old-age dependency ratio. It's expected to jump from 26.7% in 2022 to 55.5% by 2070. This means more older people relying on the younger generation, which could push the demand for retirement-friendly properties even higher. Developers might start focusing on creating communities that offer both independence and support.
With these changes, the real estate market in Cyprus is likely to see a shift. Properties that cater to retirees, with features like single-level living and proximity to healthcare, will become more attractive. Investors might find opportunities in developing or renovating homes to meet these needs.
So, if you're considering buying property in Cyprus, keep an eye on these trends. The demand for retirement-friendly homes is set to grow, and being ahead of the curve could be beneficial. Understanding these dynamics might just give you the edge in making a smart investment.
Sources: Economy Finance, Cyprus Mail, PubMed
We made this infographic to show you how property prices in Cyprus compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
15) Larnaca’s real estate market will gain from airport expansion, increasing accessibility for international buyers
The expansion of Larnaca International Airport is turning heads among international property buyers.
In 2023, the airport saw a bustling 8.1 million passengers, a jump of 34% from the previous year, and it kept up the momentum with a 5% rise in the first nine months of 2024. This boost in accessibility is making Larnaca a hot spot for those looking to invest in property.
Property prices in Larnaca are on the rise, with the average price of an apartment in Cyprus climbing by 12.7% in Q4 2023. Larnaca itself saw an impressive 11% increase, leading the charge in the real estate market. The airport's upgrades are a big part of this, especially for properties close by.
International investors are flocking to Larnaca, drawn by favorable taxation policies and the island's expanding business hubs. Real estate agents are noticing more interest from abroad, thanks to the airport's expansion and better connectivity. New flight routes and airline partnerships are making it easier than ever for tourists and investors to reach Larnaca.
With these developments, Larnaca is not just a place to visit but a place to invest. The airport's growth is a game-changer, making the city more accessible and attractive to international buyers.
Sources: Cyprus Mail, Jerusalem Post, MySpace Cyprus, Routes Online
16) Smart home technology will become a standard in new developments, shaping buyer preferences
By 2025, smart home technology will be a standard feature in new housing developments.
People are spending more on smart home systems, with global consumer spending expected to top $170 billion by 2025. This shows a strong interest in these technologies, driven by the desire for energy-efficient and automated solutions. Devices like smart thermostats and energy-efficient lighting are popular because they help reduce energy consumption and lower utility bills.
Many home buyers, about 3 in 4, are willing to pay extra for a smart home. 70% of buyers actively seek these features for the convenience, time savings, and security they offer. Millennials, in particular, are drawn to the "wow" factor of smart home technology, making it easier to attract this tech-savvy group.
The smart home market is booming, with its value expected to grow from $84.5 billion in 2024 to $116.4 billion by 2029. This growth is fueled by rising disposable incomes and safety concerns, along with the demand for convenience. Smart home features not only make properties more appealing but also boost their resale value, attracting both buyers and investors.
As smart home technology becomes more common, it will shape buyer preferences and expectations. New developments will likely include these features as standard, making them a key factor in real estate decisions.
Sources: Exploding Topics, Markets and Markets, Fingent
17) Virtual reality tours will become more common, simplifying remote property viewing for international buyers
Virtual reality property tours are becoming a game-changer for international buyers.
In recent years, over half of adults have experienced a virtual tour, and a striking 67% of home buyers want virtual tours when checking out properties. This growing demand has pushed real estate agencies, especially in places like Cyprus, to offer 360-degree virtual tours as a convenient alternative to in-person visits.
Cyprus has seen a surge in international property purchases, with non-EU buyers making up 72% of foreign transactions in 2023. This trend has continued, highlighting the need for remote viewing options. Virtual tours are a practical solution for these buyers who can't easily hop on a plane to see properties firsthand.
Thanks to technological advancements, virtual tours are now more sophisticated and accessible. With interactive 3D presentations and panoramic photos, real estate agencies can offer high-quality virtual tours without breaking the bank, making them even more appealing to potential buyers.
Consumer surveys reveal that people prefer virtual tours over traditional photos. Listings with virtual tours get more views, and buyers spend more time on these sites, showing a higher level of interest and engagement. This shift in preference is reshaping how properties are marketed.
The COVID-19 pandemic played a big role in this shift. Travel restrictions pushed the adoption of remote viewing technologies, and buyers have grown accustomed to the convenience of checking out properties from anywhere in the world. This change is here to stay, making virtual tours a staple in the real estate industry.
Sources: Cyprus Real Estate 2023 - Technology Transforms The Global Real Estate, Cyprus's real estate boom: a comprehensive analysis, Powerful Real Estate Virtual Tour Statistics in 2024
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.
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