KPMG Cyprus has published the results of the RICS Cyprus Property Price Index for the first quarter of 2026. According to Christoforos Anayitos, Managing Director of KPMG Cyprus and Head of the Real Estate and Land Development sector, the data reflects a stable and predictable market environment. The report states that all categories of real estate in Cyprus recorded slight price increases in the first quarter of 2026. Quarterly growth was minimal in most cases, indicating a mature and balanced market.
Residential Property: Apartments Remain the Main Driver of Demand
Apartments continue to show the strongest performance among all asset types. On an annual basis, apartment prices increased by 4.09%. Quarterly growth ranged from 0% in some districts to 1.67%. The most notable increase in apartment prices was recorded in Paphos and the free areas of Famagusta, while growth in Nicosia and Limassol remained more moderate.
Houses also demonstrated positive dynamics, with annual growth reaching 3.6%. However, quarterly changes were modest, ranging from 0% to 0.33%. House prices increased mainly in the free areas of Famagusta (+0.32%) and Limassol (+0.33%), while other districts remained virtually unchanged with zero growth. Analysts highlight the long-term resilience of the residential sector, especially the apartment segment, which has remained the key market driver for many years.
Commercial Real Estate: Contrast Between Offices and Retail Spaces
Office real estate recorded annual growth of 2.91%, while quarterly performance ranged from 0% to 0.83% depending on location. Warehouses showed similar results, with annual growth of 3.48% and quarterly changes reaching up to 0.91%. These segments remain strong due to stable business demand.
The weakest sector remains retail property (shops). Annual growth was only 0.72%, while quarterly changes were mostly flat or even negative in Paphos, where a slight decline of 0.09% was recorded. Minor growth in retail property was observed only in Limassol (+0.13%) and the free areas of Famagusta (+0.62%). Experts attribute this to ongoing pressure from e-commerce and changing consumer habits.
Resort Property: Stable Demand Amid the Tourism Boom
The resort property segment, traditionally important for Cyprus, also deserves special attention. Annual growth in resort apartment prices reached 3.66%, while resort houses increased by 2.42%. On a quarterly basis, the highest increase in resort apartment prices was recorded in the free areas of Famagusta at 0.39%, while resort houses showed the strongest growth in Limassol with the same figure of 0.39%.
Meanwhile, prices for both types of resort property in Larnaca remained unchanged at 0%, while Paphos recorded only symbolic growth of 0.24%. The overall stable trend demonstrates continued strong demand for tourism- and leisure-oriented properties.
Rental Market and Yields: Strong Growth in Rental Income
The rental market continues to deliver positive results for investors. The highest annual increase in rental rates was recorded in apartments (+5.1%). Offices gained 3.03%, houses 2.79%, warehouses 2.58%, and resort houses 2.75%. Once again, shops remained the weakest performer with rental growth of only 0.66%.
As for yields (capitalization rates), they remain attractive for investors. Quarterly yield changes across most asset classes were minimal. For example, apartment yields increased from 5.39% to 5.44%, office yields from 5.59% to 5.6%, while house yields slightly declined from 2.99% to 2.97%. Warehouse yields decreased from 4.23% to 4.2%, and resort apartment yields from 5.76% to 5.67%.
These indicators point to a mature and predictable market where prices and rental rates are moving in parallel.
Looking Ahead: Geopolitical Risks Seen as the Main Threat
Rubinson, Chief Economist at RICS, highlighted an important issue in his commentary on the report. Although the Cypriot economy continues to show strong performance, geopolitical tensions in the Middle East are causing serious concern, particularly for the energy and tourism sectors. This uncertainty is already reflected in the RICS Cyprus Commercial Property survey results, although it has not yet affected the Price Index itself.
However, as Rubinson warned, if the turbulence continues, there is a real risk that changing market sentiment will soon be reflected in actual price and transaction data.
It is important to note that the RICS Cyprus Property Price Index, prepared jointly with KPMG, tracks market prices and rental rates in the urban centers of Nicosia, Limassol, Larnaca, Paphos, and the free areas of Famagusta. Assessments are provided by accredited RICS professionals actively operating in the relevant markets, ensuring a high level of data reliability.