According to data published by the Cyprus Statistical Service on 7 October, the construction industry is showing steady growth. The construction production index reached 131.38 points in the second quarter of 2025 (based on a 2021 baseline of 100), representing a 4.6% increase compared to the same period last year. Despite external economic challenges and rising material costs, this indicator confirms the industry's stable development.
The growth in construction activity is attributed to increased demand for housing, as well as the expansion of tourism and business infrastructure. Limassol and Larnaca are developing particularly rapidly, with large-scale projects ranging from residential complexes to business centres and coastal hotels continuing to be implemented.
Price increases are having an impact on the real estate market
The producer price index in construction was 126.32 points in the same period, which is 2.1% higher than in the first quarter of 2025 and 5.4% higher than in the second quarter of 2024. On average, production grew by 3.7% and the price index by 4.9% in the first half of 2025.
Experts note that the price increase is not only associated with the rise in the cost of construction materials, but also with increased labour and logistics costs. At the same time, demand for housing in Cyprus remains consistently high, particularly among foreign buyers and investors interested in secondary real estate and the rental sector.
Industry development prospects
The Cypriot government is confident that the positive trend will continue in the second half of 2025. Continued funding for infrastructure projects, improvements to the transport network and green construction development are creating favourable conditions for sustainable growth.
Additionally, Cyprus is introducing new construction technologies to improve the energy efficiency of buildings and reduce their carbon footprint. These measures align with European sustainable development policies and make the local real estate market more attractive for investment.