According to preliminary data from the Cyprus Statistical Service published on Friday, October 3, the House Price Index (HPI) in the second quarter of 2025 stood at 113.99 points (base year 2015 = 100). Compared to the first quarter, the index increased by only 0.2%, and year-on-year growth was just 1%. This confirms that the Cypriot real estate market is entering a phase of slow but steady growth.
Trends in the Cyprus Real Estate Market
Over the past twelve months, the housing market in Cyprus has shown a gradual slowdown in growth rates. While annual growth rates in 2024 fluctuated between 2% and 2.7%, in Q2 2025 the increase dropped to 1%.
On a quarterly basis, the dynamics were as follows: Q2 2024 — +1.2%, Q3 2024 — +0.7%, Q4 2024 — -1.0%, Q1 2025 — +1.1%, and Q2 2025 — +0.2%. Analysts interpret this trend as a stabilization of prices after a period of rapid growth driven by high demand from foreign buyers and investors.
Why Prices Have Stabilized
Experts attribute the modest growth to several factors. First, in 2025 the Cypriot government tightened control over building permits and housing energy standards, temporarily slowing the launch of new projects. Second, rising interest rates in the Eurozone are limiting buyer activity, particularly in the mortgage segment.
At the same time, demand for quality housing in Limassol, Nicosia, and Paphos remains stable, while coastal areas have even seen growth. Experts forecast that in the second half of 2025, the market will maintain moderate growth at around 1–1.5%, with investor activity potentially increasing ahead of Cyprus’s EU presidency in 2026.
How the House Price Index Is Calculated
The HPI is a key indicator of the real estate market’s condition. It is calculated quarterly and reflects changes in the average price of all types of residential properties, both new and secondary. The index also takes into account the value of the land on which homes or apartments are located.
Data for the HPI is provided by the Land Department under the Ministry of Interior of Cyprus. The statistical sample includes all regions under the control of the Cypriot government.
The methodology is based on a hedonic regression model, which accounts for property characteristics (age, area, building type, and location). A “moving window” approach is used to increase accuracy, and results are revised as new data becomes available.
Market Outlook
According to the latest forecasts from the Cyprus Developers Association, the market could pick up in 2026 due to new investment initiatives, infrastructure development, and growing interest in eco-friendly housing. In particular, an increase in projects certified to Energy Class A standards and equipped with solar panels is expected.
Against the backdrop of a general trend toward sustainable development, Cyprus remains an attractive destination for real estate investment—both for local buyers and foreign investors considering the island as a safe and stable jurisdiction for investment.