The dominance of new-build developments across Cyprus is reshaping buyer behaviour, with increasing numbers of local purchasers opting for smaller apartments in an effort to secure affordable housing.
Industry figures argue that the market currently offers a wide range of available properties and reject claims of a widespread housing shortage. They also note that recent geopolitical tensions, despite causing an initial slowdown, have ultimately reinforced demand across the property sector.
Latest figures from the Department of Lands and Surveys highlight the market’s resilience. During the first quarter of 2026, property sale contracts increased by 14% year-on-year, while total transactions reached 4,079.
Strong supply supports market activity
Speaking to StockWatch, Cyfield Group chief executive George Chrysochos said the market recovered quickly following the initial uncertainty caused by regional conflicts and flight restrictions affecting several Arab countries.
“Despite the first reaction to the war and the suspension of flights from Arab countries, the market returned rapidly, resulting in higher transaction levels than last year,” he said.
According to Mr Chrysochos, the supply of available properties has expanded significantly, creating a healthier balance between supply and demand and offering more opportunities for prospective buyers.
He added that increased housing supply has also helped stabilise rents after several years of steep increases.
However, prices for new-build homes continue to rise, driven largely by construction costs and escalating land values.
In Limassol, land prices remain under pressure due to the limited availability of development plots and the arrival of major investors from neighbouring countries undertaking large-scale projects.
Developers are also facing higher costs linked to global supply chains, transport, shipping and labour shortages. These factors have pushed construction costs higher, leading to annual price increases of between 5% and 10% for new-build properties in Limassol.
Property values in the city continue to vary significantly according to proximity to the coastline. Seafront developments typically command between €8,000 and €15,000 per square metre, while conventional apartments located inland near or above the motorway generally average around €4,000 per square metre.
In contrast, Nicosia remains considerably more affordable for local buyers. A typical two-bedroom apartment in Latsia currently sells for between €220,000 and €230,000. With bank financing covering up to 80% of the purchase price, buyers generally require a deposit of between €40,000 and €50,000.
Rental pressures continue across regional markets
Estate agent Vassos Zannetos said a large number of modern residential developments have entered the Larnaca market, but the rental levels sought by landlords remain beyond the reach of many local residents.
A two-bedroom apartment within the city typically commands rents of €1,000 per month or more, while three-bedroom properties often exceed €2,000 per month. Properties in surrounding areas are generally only around €100 cheaper.
Mr Zannetos highlighted a severe shortage of affordable rental homes in the €600 to €800 monthly range, noting that long-term tenants are reluctant to leave existing properties due to significantly higher rents elsewhere.
Purchase prices in and around Larnaca also remain elevated. Two-bedroom apartments generally start at €240,000, while three-bedroom homes frequently exceed €400,000. Strong demand continues to support pricing, with developers showing little willingness to reduce asking prices.
Affordability challenges are increasingly affecting Cypriot buyers, with rising property values spreading beyond urban centres into suburban and rural communities.
Kiti remains a popular and well-organised residential area, where two-bedroom apartments are priced at around €200,000 and three-bedroom units start from approximately €280,000.
Meanwhile, Alethriko has emerged as an increasingly attractive alternative for buyers seeking better value within easy reach of Larnaca. Mr Zannetos believes developers should place greater emphasis on projects aimed at local buyers, allowing two-bedroom homes to be offered closer to the €190,000 mark.
Foreign demand continues to drive prices higher
In Paphos, estate agent George Petrou said rental supply remains extremely limited, particularly for one-bedroom apartments.
He argued that both rental and sales markets are increasingly targeting foreign buyers rather than local households. Monthly rents for two-bedroom apartments typically start from €800, while three-bedroom properties generally exceed €1,200.
Mr Petrou said demand from Israeli buyers remains strong, particularly for land and residential properties. He also believes ongoing instability in the Middle East is encouraging more investors from the region, especially from Dubai, to view Cyprus as a safe investment destination.
For local buyers, however, affordability has become a growing concern.
“Three years ago, someone could purchase a building plot for €200,000. That is no longer possible,” he said.
According to Mr Petrou, many Cypriots are searching for homes priced around €300,000, yet even at that level buyers often struggle to secure anything other than older resale properties.
George Mouskides, director of Fox Smart Estate Agency and a member of the Property Owners Association, said the market began normalising in 2023 but is now experiencing unprecedented levels of apartment construction.
The surge in new developments has helped place downward pressure on rents, although he expects rental values to stabilise at current levels over time.
Mr Mouskides estimates that rising demand and higher raw material costs linked to global conflicts have pushed property prices up by around 10% across all major Cypriot cities.
He also noted a clear shift in purchasing habits, with local buyers increasingly favouring smaller and more affordable apartments or turning to older resale properties that offer larger living spaces at lower prices.
Despite affordability concerns, buyers are not postponing purchases.
“People know that prices rise every year, so they continue to buy,” he said.
Current market pricing places one-bedroom apartments at around €170,000, two-bedroom units at approximately €270,000 and three-bedroom properties at around €320,000.
Two-bedroom apartments remain the most popular choice among purchasers, while one-bedroom units dominate the rental market, followed by two-bedroom properties.
Conclusion
Cyprus’ residential property market continues to demonstrate strong momentum, supported by robust demand, expanding new-build supply and sustained foreign investment.
Yet while developers are delivering more homes than ever before, rising construction costs and growing international demand continue to challenge affordability for local buyers. As a result, smaller apartments and selected resale properties are increasingly becoming the preferred route onto the housing ladder for many Cypriot households.
