The Cyprus branch of the Royal Institution of Chartered Surveyors (RICS) published its latest report on changes to the Cyprus Property Price Index. According to the agency's latest data, most categories of housing on the island showed moderate price growth in the second quarter of 2025. These results confirm that Cypriot real estate remains attractive to local buyers and foreign investors alike.
Leading and lagging regions
According to the report, Larnaca was once again among the leaders, recording the most significant price increases, particularly for residential buildings and warehouses. Thanks to a new coastal front and investments in infrastructure, this city has been actively developing in recent years and is strengthening its position as one of the most promising markets for real estate investment.
Meanwhile, Limassol, traditionally a center for premium housing, showed minimal or even negative changes, particularly in the warehouse and retail sectors. This reflects a cooling of investor interest in expensive commercial properties.
Paphos experienced the most significant decline in warehouse prices but maintained positive momentum in the apartment sector. Nicosia recorded steady growth in the housing market, and Famagusta's vacant areas led the office space segment.
Long-term trends and investment attractiveness
A comparison with the same period in 2024 shows that residential apartments and houses perform best in Cyprus, while shops remain the least attractive category for investment. The overall market trend indicates a gradual recovery following a challenging decade of significant fluctuations.
Residential real estate in Cyprus is showing steady price growth, while commercial properties are developing unevenly. The weak dynamics in the retail sector are particularly noticeable, with investors increasingly preferring online sales to traditional stores.
The resort real estate segment
The report pays special attention to real estate for recreation and tourism. Resort apartments and villas in Cyprus continue to strengthen their position thanks to a steady flow of tourists. Larnaca has seen particularly active growth, with new seaside complexes in high demand.
Paphos, on the other hand, has shown more moderate results but remains a popular destination for second-home buyers from Europe, the UK, and Israel. The tourism sector continues to support the demand for short-term rentals, making these properties attractive to investors focused on rental income.
Rental market and profitability
The rental segment is also growing. The largest increase in rental rates in the second quarter of 2025 was for apartments, where demand from students, foreign specialists, and tourists exceeded supply. Warehouses also showed positive dynamics, while rental rates for shops continued to decline.
Compared to last year, real estate yields remained stable: apartments (5.41%, down from 2.97%), residential buildings (2.97%), offices (5.6%), warehouses (4.24%), tourist apartments (5.7%), and tourist houses (2.79%). Only retail saw a slight decline in yields. Shops began to bring their owners an average of 5.75%.
Market Outlook and Significance for Cyprus
According to RICS experts, Cypriot real estate remains attractive for investment, and the market as a whole is showing healthy development. Price stability and moderate growth enable investors to plan long-term investments, and the gradual recovery of the Cypriot economy supports demand for housing and rentals.
Economists note that dynamics are influenced by internal factors, such as urbanization, migration, and infrastructure development, as well as international interest in Cyprus as a safe and profitable place to live and do business. Further stabilization is expected in the coming months, especially in the residential and tourist real estate segments.