Since mid-2023, the residential property market in Cyprus has undergone significant changes under the influence of global and regional factors. According to Pavlos Loizou, CEO and co-founder of Ask Wire, the rise in prices was influenced by the satisfaction of pent-up demand after the pandemic, the war and the migration of people from Russia, Ukraine, Belarus and other countries.
Pavlos Loizou noted that the demand for office space has also changed due to the spread of remote work. Class B and C offices have lost popularity, while Class A premises, as well as logistics centers for e-commerce and data centers related to AI and cloud technologies, have become more popular.
The market was significantly impacted by the migration of Russian-speaking residents, many of whom settled in Cyprus on a medium- and long-term basis, opened businesses, enrolled their children in local schools and even obtained local financing. The combination of migration factors and deferred demand after the pandemic led to a significant increase in residential property prices.
Greece has seen an influx of foreign investors by 2024, thanks to the Golden Visa program, geopolitical instability in the Middle East, and slowing economic growth in China. In Cyprus, similar trends have also led to increased demand for residential and commercial property from Israeli and Lebanese investors.
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Development of the construction sector
Construction activity has focused on luxury projects aimed at investors renting out residential properties through short-term platforms like Airbnb or looking at residential property as an investment . However, Pavlos Loizou warned that the financialization of residential property is creating affordability issues, displacing middle-class households and driving up rents.
The Cypriot and Greek authorities have taken steps to address imbalances in the residential property market. Controls against tax evasion on rental income and residential property transactions have been strengthened. Grants and housing programmes have been announced to improve the affordability of housing for low-income families and workers in essential industries. EU funds have also been allocated for the renovation of older properties to improve their energy efficiency.
Loizou stressed the importance of these programs to ensure accessibility and stability of the market in the long term.
Forecasts for 2025
The residential property market in 2025 promises to be rich in both opportunities and risks. Luxury property values will continue to rise, driven by demand related to geopolitical events and the reputation of real estate as a safe investment . However, there is a risk of oversupply if demand in this segment declines.
Interest in Class A offices will remain high, while demand for Class B and C premises will continue to decline. The state is expected to continue to combat tax evasion by tightening controls over rental income and residential property transactions.
In addition, non-performing loan managers will seek to accelerate the sale of mortgaged residential properties to take advantage of rising prices and return funds to investors. Affordable housing programs are also expected to expand, creating opportunities for developers targeting the moderately priced segment.
Recommendations for investors
Loizu advises caution when building investment portfolios. For smaller portfolios with less than 15% residential exposure, exchange-traded funds (ETFs) are recommended for their liquidity and diversification. Large investors should consider buying entire buildings or multiple residential properties in urban centers, as demand for such properties is stable.
Loizu paid special attention to projects for the modernization of old residential properties using European grants. Energy-efficient reconstructions add value to properties and meet the requirements of environmental development.
Overall, the Cyprus residential property market in 2025 will be shaped by global trends and local reforms. Maintaining a balance between affordability and a strategic approach to development will help investors and developers exploit the market’s potential in the long term.
