The Cyprus real estate sector experienced steady, mild upward momentum during the first quarter of 2026. According to the latest figures released by RICS and KPMG in Cyprus, asset values across most market categories moved within a narrow positive range. Residential apartments maintained their position as the leading asset class for both capital appreciation and rental yield growth, whereas retail assets continued to show the weakest overall performance.
Capital Growth and Rental Performance Breakdown
Across the commercial and residential sectors, capital values showed positive annual movement led primarily by housing. Apartments recorded the strongest overall price growth at 4.09%, followed closely by residential houses at 3.60%, industrial warehouses at 3.48%, and office spaces at 2.91%. Conversely, retail property values registered the weakest performance with a minor annual increase of 0.72%.
In the rental market, apartments once again outperformed all other property types with an annual rent increase of 5.10%. Office rentals expanded by 3.03%, residential home rents rose 2.79%, and warehouse rents grew 2.58%, while retail space rents saw a minimal gain of 0.66%. Rental yields across Cyprus held largely stable year over year. Apartment yields edged up slightly from 5.39% to 5.44%, and office yields shifted marginally from 5.59% to 5.60%. Meanwhile, yield rates experienced minor downward adjustments for residential houses (from 2.99% to 2.97%), retail units (from 5.78% to 5.77%), and warehouses (from 4.23% to 4.20%).
District-Level Variations Across Cyprus
Regional market dynamics varied significantly between urban centers during Q1 2026:
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Quarterly Capital Growth Leaders: Paphos led overall district growth with a 1.67% quarterly increase, driven heavily by apartments. Famagusta followed closely with 1.24% growth, showing the highest single-quarter jump in residential house values (+1.37%).
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Urban Center Stability: Limassol registered a moderate 0.62% quarterly price rise, while Nicosia saw 0.59%. Larnaca recorded zero price movement during the quarter.
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Commercial Real Estate Dynamics: Retail property prices remained virtually flat nationwide, recording slight gains in Limassol and Famagusta offset by minor declines in Paphos. Office and warehouse movements remained minimal, confined to minor adjustments in specific provinces.
Tourism-Linked Property Sector Highlights
Sustained international visitor arrivals continued to support capital values and rental yields within the tourist asset segment, albeit at a more moderate growth rate:
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Annual Value Increases: Tourist apartments surged 3.66%, outperforming tourist residences which grew by 2.42%.
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Quarterly Tourism Trends: Famagusta posted the highest quarterly gain for tourist apartments at 1.28%, while Limassol led quarterly gains for tourist residences with an increase of 0.51%. Larnaca registered flat growth across all tourist property types.
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Tourism Yield Adjustments: Yields for tourist apartments shifted from 5.76% to 5.67%, while tourist residence yields ticked up slightly from 2.79% to 2.80%.
The quarterly data collected by RICS-accredited professionals covers urban centers under the direct control of the Republic of Cyprus (Nicosia, Limassol, Larnaca, Paphos, and Paralimni-Famagusta).
Source: Stockwatch.com.cy