According to the latest RICS Cyprus Property Index, prepared in collaboration with KPMG, the Cyprus real estate market continued along a path of modest but steady growth in the first quarter of 2026. During the first three months of the year, property values recorded a slight increase across all asset classes. Residential real estate once again demonstrated resilience, with apartments outperforming houses. Office properties and holiday real estate also posted moderate gains, while retail space remained the weakest-performing sector.
Apartments Lead Price Growth: +4.09% Year-on-Year
Compared to the same period last year, apartments emerged as the strongest-performing property category in Cyprus. Houses and warehouse properties also recorded solid growth, offices posted moderate gains, while retail real estate once again lagged behind other sectors. Annual price changes were as follows: apartments increased by 4.09%, houses by 3.6%, warehouses by 3.48%, offices by 2.91%, and retail properties by just 0.72%. These figures confirm that residential assets remain the preferred choice for both buyers and investors, supported by strong underlying demand and limited supply in key locations.
Holiday Properties: Tourism Continues to Support the Market
Holiday properties continued to record positive growth, although at a slower pace than in previous quarters. Holiday apartments were the clear leaders within this segment, highlighting the ongoing strength of Cyprus’s tourism industry and the sustained demand for short-term rentals. Over the year, prices for holiday apartments increased by 3.66%, while holiday houses rose by 2.42%. These results reflect continued confidence in tourism-related real estate, particularly in coastal and resort areas where demand remains exceptionally strong.
Rental Rates Continue to Rise Across All Segments
The rental market also maintained positive momentum during the first quarter of 2026. Apartments recorded the strongest increase in rental rates (+5.1% year-on-year). Offices rose by 3.03%, houses by 2.97%, holiday homes by 2.75%, warehouses by 2.58%, holiday apartments by 2.05%, while retail property once again ranked last with growth of only 0.66%. The strong rise in apartment rents underlines robust tenant demand within the residential sector, particularly in urban centers and areas with a high concentration of employment opportunities.
Rental Yields Remain Largely Unchanged
Rental yields remained almost unchanged compared to the same period last year, indicating a balanced relationship between property prices and rental income: apartments (-0.05%), houses (-0.02%), retail properties (-0.01%), warehouses (-0.03%), offices (-0.01%), holiday apartments (-0.09%), and holiday houses (+0.01%). Although yields declined slightly across most sectors, the movements were minimal. This suggests that investments in Cyprus real estate continue to generate relatively stable returns despite ongoing price growth.
Simon Rubinsohn, Chief Economist at RICS, noted that while the Cypriot economy continues to perform well, concerns are growing about the potential impact of the conflict in the Middle East. So far, this has not been reflected in the RICS Cyprus Property Index in collaboration with KPMG, but the longer current challenges persist, the greater the risk that changing market sentiment will eventually be reflected in objective statistical data.
Against a backdrop of geopolitical uncertainty in the Eastern Mediterranean, Cyprus continues to be viewed as a relatively safe haven for capital. Demand from foreign investors, particularly from Israel, Lebanon, and the Gulf countries, remains strong. In addition, the Cypriot government continues to implement initiatives aimed at attracting foreign professionals and digital nomads, which supports demand for rental housing in major cities. During the second half of 2026, geopolitical developments are expected to remain the key variable, although the baseline scenario still points to moderate growth in the residential sector and stable rental yields of approximately 3–5% per year, depending on the property type and location.