Blown by the sea winds, Limassol is the bustling business capital of ancient Cyprus.
In recent years, the city has become one of Europe's most popular regions for property investment. At the forefront of sustainable development in the island's property market, Limassol offers a harmonious blend of natural charm and economic opportunity. This popular resort is currently home to a highly educated, multicultural community that attracts tourists and investors, fuelling the construction and property sectors, mainly from European countries and the Middle East.
What makes Limassol attractive
The main reasons why Limassol has become attractive for residential and commercial property finance are as follows
- Climate and strategic location. The city is located in the centre of the island, with easy access to all regions of Cyprus.
- Limassol, where start-ups are born and businesses flourish, occupies a significant position in the Cypriot economy. This is facilitated by favourable taxation and government incentives that attract international companies.
- The city offers a high quality of life. It is known for its pleasant beaches, developed tourist industry, international schools, high quality medical services, popular clubs, restaurants and shopping centres.
- Foreign property owners in Limassol are entitled to permanent residence, including family members, allowing them to live, study and work in the European Union.
- The cost of residential and commercial property has risen steadily in recent years, making it a reliable investment.
- Limassol has a large and diverse property market, offering a wide range of properties from luxury seafront villas to modern apartments in new residential complexes. In recent years, the demand for luxury properties has grown, increasing the investment opportunities in the region.
- The profitability of the rental business is evidenced by high yields, which can reach 8-10%. The rise of this sector of the market is due to the increase in the number of tourists and expats, regardless of the season. According to the Cyprus Statistical Service, the return on local property is one of the most stable in Europe, increasing by 2-4% annually.
Last year's statistics
In order to make an accurate forecast for the foreseeable future, it is necessary to assess current market indicators, which can serve as a starting point. Last year, Limassol remained the leader of the Cypriot property market with a 32% share. At the same time, the number of transactions decreased by 1% compared to 2023 and amounted to 5,032 transactions. There was a noticeable increase in demand from local investors, who concluded 3,239 agreements.
Foreigners invested in Cyprus real estate 1,793 times, or 22% less than last year, which represents a significant drop in market demand. Of these, the number of transactions by EU citizens fell by 13% (459 transactions) and by 26% for non-EU citizens (1,334 transactions). The volume of investment in the residential sector in Limassol decreased by 7% in monetary terms and amounted to almost €1.7 billion. The average annual growth in property prices in the region was 9.2%.
Property market outlook
Statistics show a gradual saturation of the market, with continued demand from the island's local population. Data on foreign investors confirms a decline in the number of transactions, while enquiries continue to come in from citizens of Northern Europe, particularly the UK, where taxes are rising. Third-country nationals who moved to the island due to the outbreak of the conflict can be classified as potential buyers if they were renters in 2022-2024 and decided to make Cyprus their second home.
Investment in prime properties will continue to grow, leading to price increases of up to 25% over the next two years, according to experts. This is due to the limited supply in prestigious areas and the resulting increased competition among buyers. The accelerated granting of Cypriot citizenship to sought-after high-level professionals within 4-5 years may become an impetus for this category of investors to purchase homes for their own use.
The opening of six new universities on the island over the next few years will attract those seeking a quality education. This could be of interest to both future students and potential landlords. Corporate demand for offices, co-working spaces and business centres will remain strong. Rising rents will keep Limassol attractive to investors seeking a stable passive income.
Cyprus' expected entry into the Schengen area by the end of 2025, as announced by the country's President, could also act as a catalyst for the market. Potential investors are positively influenced by the changing face of Limassol, the construction of new high-rise buildings, comfortable residential complexes and modern infrastructure. These arguments work in favour of the city's image as a whole and increase its investment attractiveness for a wide range of potential property owners. Limassol is increasing its potential to maintain and strengthen its position as the leader of the Cypriot property market.
Read also:
