The Cyprus property market continues to demonstrate steady growth despite ongoing economic and geopolitical uncertainty. According to the latest RICS Cyprus Property Price Index with KPMG in Cyprus for Q2 2026, apartments recorded the strongest increase in rental rates.
Over the year, apartment rents in Cyprus increased by 7.36%. Holiday apartments followed with growth of 6.43%. House rents rose by 5.3%, holiday houses by 5.19%, and offices by 4%. Growth in the commercial segment was much more moderate: warehouse rents increased by 1.96%, while retail premises rose by 1.22%.
This means that the residential segment currently remains the main driver of growth in Cyprus’s rental market. At the same time, rental growth is taking place against the backdrop of rising property values. According to RICS and KPMG, apartments also remain the most dynamic property category in terms of sale prices: in Q2 2026, their value in Cyprus increased by 5.42% year on year.
Which property types in Cyprus offer investors the highest returns
Rental growth has a direct impact on property investment yields. In Q2 2026, annual yields across different property types ranged from 2.85% to 5.82%. The leading categories were:
- holiday apartments — 5.82%, compared with 5.75% a year earlier;
- retail premises — 5.78%, compared with 5.75%;
- offices — 5.63%, compared with 5.61%;
- standard apartments — 5.51%, compared with 5.41%.
The yield on standard apartments increased particularly noticeably. Over the year, it rose from 5.41% to 5.51%. This was the strongest increase among the main property categories. The reason is straightforward: apartment rents are rising faster than the value of the properties themselves. In this case, yield is calculated as the ratio of annual rental income to the value of the property.
Warehouses were the only segment where yields declined. The figure fell from 4.24% to 4.15%, despite rising rental rates. House yields remained almost unchanged at 3.01%, compared with 2.97% a year earlier. Holiday houses ranked last at 2.85%, compared with 2.79%. The difference between the highest and lowest yields is therefore roughly twofold.
Larnaca became the main growth leader in the Cyprus property market
In Q2 2026, Larnaca recorded the strongest quarterly performance across several property categories. The district led in price growth for apartments, houses, offices and warehouses. The increase in standard apartment prices was particularly notable: they rose by 5.59% in Larnaca during the quarter. House prices increased by 4.48%, offices by 3.63%, and warehouses by 3.39%. Larnaca also outperformed other Cyprus districts in the holiday property segment:
- holiday apartments — +3.85% for the quarter;
- holiday houses — +3.10%.
By comparison, holiday apartment prices increased by 2.52% in Paphos, 1.73% in Limassol and 0.63% in the government-controlled areas of Famagusta. RICS and KPMG experts link this trend primarily to sustained demand for residential and holiday property. Interestingly, in Q1 2026, Paphos and the government-controlled areas of Famagusta had led apartment price growth, while Limassol and Nicosia showed more moderate momentum.
What these figures mean for the Cyprus property market
The latest statistics highlight an important trend: rental property remains one of the most dynamic segments of the Cyprus market, while apartments are becoming particularly attractive to investors due to the combination of rising values and rental rates. At the same time, the market is developing unevenly. Larnaca has significantly strengthened its position and became the leading district across several categories in Q2 2026. Paphos also maintains strong positions in the residential and holiday segments, while Limassol remains one of the island’s key markets but no longer leads across all categories.
As a reminder, the RICS Cyprus Property Price Index with KPMG in Cyprus is published quarterly and tracks sale and rental prices across the main property types in all cities of Cyprus. The key conclusion for the Cyprus property market in 2026 is clear: apartments remain the fastest-growing rental segment, while Larnaca is becoming one of the island’s main centres of property price growth.