The resilience of the property sector in Cyprus will largely depend on how long the current geopolitical crisis lasts. So far, however, the market has proven remarkably robust, according to professionals across the industry.
If the conflict ultimately proves short-lived, Cyprus could actually benefit as a safe investment destination. Market insiders point out that similar reactions followed major global disruptions in recent years, from the Covid-19 pandemic onwards.
For the moment, the sector appears to be weathering uncertainty, though temporary delays and concerns about rising costs remain.
War disrupts travel and pauses property interest
Michalis Zavos, CEO & MD of the Zavos Group, told StockWatch that the closure of airports has already created tangible challenges.
“Clients cannot travel, so some sales have effectively been put on hold,” he said.
However, he believes the momentum of the past few years will quickly return once flights resume.
“Cyprus remains a safe destination for foreign investors,” Zavos noted, adding that competing markets such as Dubai, Abu Dhabi and other neighbouring locations are currently facing difficulties.
“As a result, many foreign investors may wish to leave those markets, and Cyprus could become an attractive alternative – especially if the war ends soon.”
Interest from Israeli buyers remains strong, particularly for second homes, although current hostilities have halted activity temporarily.
Zavos also highlighted Cyprus’ strengthened position within Europe.
“The support shown by European states such as Greece, France, Italy and Spain further reinforces Cyprus as a safe European country,” he said.
Meanwhile, a new buyer group is emerging. Poland has recently entered the market, with growing investment activity – particularly in Paphos – where Polish buyers appear drawn to a quieter lifestyle.
Yet the sector continues to grapple with a long-standing challenge: labour shortages. With airports closed, workers are unable to travel to Cyprus, leading to delays in construction projects.
Concerns over rising Cyprus property prices
George Mouskides, General Manager at FOX Smart Estate Agency, believes the economic impact will largely depend on the duration of the conflict.
“If the unrest lasts only a few weeks, the side effects of the war will be minimal,” he said.
However, a conflict stretching beyond three months could create wider economic pressure.
Energy costs would rise, triggering a chain reaction across multiple sectors and increasing inflation. Construction materials would become more expensive, pushing property prices higher.
“Initially, prices will increase for newly built properties,” Mouskides explained. “That will inevitably affect rental values and eventually pull up the prices of older homes as well.”
A prolonged conflict could also dampen demand from the domestic market.
“When citizens are being asked to prepare emergency bags and supplies for shelters, their priorities inevitably change,” he said.
If the war ends quickly, however, Mouskides expects the property market to rebound rapidly.
“No transactions will ultimately be lost – they will merely be postponed.”
Demand from Israeli buyers for second homes close to their country is expected to remain strong, as is interest from Lebanese investors.
A further unknown is Dubai
“The key question is whether investor interest there will continue as it has in recent years – or whether Cyprus will become a more appealing option,” he said.
Transactions delayed, not cancelled
George Chrysochos, Executive Director of Cyfield Group, believes any slowdown will prove temporary.
“Even if some transactions are delayed by a few weeks, they will still go ahead later,” he said.
According to Chrysochos, a short-term pause in activity will not undermine the market’s long-term trajectory.
“We saw similar situations during Covid, and later with the war in Ukraine and the conflict in Gaza,” he noted.
“Despite those challenges, real estate not only remained resilient but ultimately strengthened.”
Construction activity in Cyprus is continuing as normal, although Chrysochos warned that rising oil prices could fuel inflation and push property prices upwards.
One lesson from the past decade, he added, is clear.
“Whenever tensions escalate in our region, Cyprus ultimately benefits.”
