The Cyprus real estate market maintained a resilient, steady upward trajectory throughout the second quarter of 2026, defying broader economic uncertainties and regional geopolitical volatility. Data released by RICS and KPMG in Cyprus highlights positive capital value movements across most asset classes and districts, alongside robust performance in the rental sector. While demand remains healthy island-wide, market momentum is shifting noticeably toward key regional hotspots.
Key Sector Highlights & Structural Trends
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Apartments & Residential Demand
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Apartments remain the primary driver of capital appreciation across mainstream residential categories, registering over 5% annual price growth.
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Single family house values also posted steady gains, with the strongest upward movements recorded in Larnaca and Paphos.
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Larnaca Emerges as a Key Growth Center
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Larnaca outpaced other districts during Q2 2026, recording the highest price growth for apartments and office spaces, as well as the largest quarterly gains for holiday properties.
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Industrial warehouse demand expanded notably in both Larnaca and Paphos, signaling diversification beyond traditional residential and resort buyers.
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Commercial & Leisure Market Dynamics
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Retail: Retail premises continue to trail the wider property market as the weakest performing asset class, recording minimal gains in most areas and a slight decline in Famagusta.
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Leisure/Tourism Assets: Tourism linked properties demonstrated strong stability, with holiday apartments outperforming holiday houses in value growth. Fears of regional conflict curtailing tourism demand have not materialized in hard transaction data.
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Record Transaction Volume & Supply Pipeline
Market liquidity reached multi-year highs during the second quarter. Figures from Cyprus Sotheby’s International Realty record 4,622 residential transactions valued at €1.38 billion in Q2 2026, marking the strongest second quarter for transaction volume since 2016.
The construction sector has actively responded to sustained demand, although new inventory faces timing and cost constraints:
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Building Permits: Official metrics show 7,131 housing units authorized in building permits during the first four months of 2026, a 65% increase year on year. Apartment complex permits led the surge with an 85.9% increase.
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Construction Material Costs: Input prices continue to rise, with the Statistical Service reporting a 3.12% annual increase in construction material costs in June.
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Economic Backdrop: While the Central Bank of Cyprus noted a mild easing in general economic sentiment in Q2 due to Middle East developments, underlying real estate demand has remained firmly intact.
Source: Cyprus Property News