Are housing prices rising in Cyprus?

In recent years, property prices in Cyprus have been steadily rising. This growth is driven by various factors such as high demand from foreign investors, increased construction costs, and economic reforms. In 2024, the island’s real estate market remains attractive for both local buyers and international investors. Let’s take a closer look at the reasons for price growth, key trends, and future forecasts.

Main Reasons for Property Price Growth

Several key factors contribute to the increase in real estate prices in Cyprus:

1. High Demand from Foreign Investors. Despite the termination of the “Golden Visa” program, which allowed foreigners to obtain Cypriot citizenship through investment, demand for Cypriot real estate remains high. Investors from politically unstable countries, such as Russia and Ukraine, view Cyprus as a safe haven for capital. British, Chinese, and Middle Eastern citizens are also actively purchasing property on the island.
2. Improvement of Infrastructure. In 2024, the Cypriot government continues to invest in infrastructure projects: building new roads, developing the transportation network, and expanding ports and airports. This not only improves the quality of life on the island but also contributes to the rise in property prices, especially in areas where modernization is actively underway.
3. Rising Construction Costs. One of the reasons for price increases is the growing cost of building materials and labor. Amid high inflation and global price hikes for materials, developers are forced to raise prices for new properties. This is particularly noticeable in the new-build segment, where prices can be 15-20% higher compared to 2020-2021.
4. Low Mortgage Interest Rates. Although mortgage rates have slightly increased in recent years, they remain relatively low compared to most European countries. This makes home purchases accessible to both locals and foreign buyers. Mortgage conditions in Cyprus are quite attractive, with loans available to both citizens and residents with a residence permit.

Which Regions Are Showing the Highest Price Growth?

The real estate market in Cyprus is diverse, and price dynamics vary by region:

• Limassol. This city remains the most expensive and in-demand region on the island. Developed infrastructure, proximity to the business center, and popularity among international companies make Limassol attractive to foreign investors. Property prices here can range from €500,000 for an apartment to several million for a villa with a sea view. In 2024, a steady price increase of 8-10% per year is observed.
• Paphos. This city on the western coast, known for its ancient landmarks and beautiful beaches, is also in high demand among foreign buyers. Prices here are slightly lower than in Limassol, but in recent years, Paphos has shown steady property price growth. The average price increase in 2024 was around 9%, making it one of the most dynamic regions in the market.
• Larnaca. This region is becoming increasingly attractive to buyers looking for more affordable housing options. Larnaca is seeing active construction of new residential complexes, attracting both local and foreign buyers. Property prices here remain more affordable, but they are rising each year—in 2024, the growth was around 15%, especially in the segment of new apartments and houses.
• Ayia Napa and Protaras. The tourist areas on the eastern coast are also showing significant growth. Attractive beaches and growing interest from tourists make these regions popular for purchasing second homes or rental properties. Prices here can increase by 7-9% annually, particularly for seaside homes and apartments.

Global and Local Factors Influencing the Market

The real estate market in Cyprus is influenced by both local and global factors. The most significant are:

• Global Economic Trends. Economic instability worldwide, inflation, and rising loan interest rates impact the real estate market. While local buyers face difficulties in obtaining mortgages, foreign investors continue to actively invest in real estate, viewing Cyprus as a reliable market for long-term investments.
• Growth of the Tourism Industry. The recovery of the tourism sector after the pandemic also affects the real estate market. Many investors purchase properties to rent out to tourists. In 2024, rental prices for apartments and houses increased by 18%, making real estate purchases for rental purposes even more attractive.
• Development of “Green” Projects. In recent years, there has been a growing interest in eco-friendly construction and sustainable projects in Cyprus. Homes equipped with modern energy-efficient systems are becoming increasingly popular. Although these properties are priced higher than the market average, they allow owners to significantly save on utility bills, making them a profitable long-term investment.

Real Estate Market Outlook for 2024 and Beyond

Experts predict that the real estate market in Cyprus will continue to grow in the coming years, although the pace may slightly slow down. The highest growth is expected in the luxury housing segment, especially in Limassol and Paphos, where foreign investor interest remains high.

Demand for real estate will also be supported by infrastructure development, the construction of new residential and tourist facilities, and the improvement of the country’s economic situation. The rental market will remain an important factor, as tourists continue to visit the island actively, maintaining high rental rates and making real estate purchases a profitable investment for generating income.

Property prices in Cyprus continue to rise, driven by high demand from foreign investors, infrastructure improvements, and rising construction costs. Regions such as Limassol, Paphos, and Larnaca show the highest price growth. This trend is likely to continue in the coming years, making the real estate market in Cyprus attractive for long-term investments and permanent residence purchases.