The Cyprus property market remained remarkably resilient in the second quarter of 2026, despite a more uncertain economic situation and geopolitical tensions in the region. The latest figures show a continued demand for homes, rising rents and strong interest in apartments. But the market is not moving at the same pace everywhere.
The latest RICS Cyprus Property Price Index with KPMG in Cyprus found positive price movements in most districts and property types in the second quarter of 2026. Apartments remained the strongest-performing residential asset, with Larnaca leading the market. House prices also increased, with particularly strong gains in Larnaca and Paphos.
The rental market is also growing stronger. Apartment rents recorded the strongest annual growth, followed by holiday properties and houses. Holiday apartments continued to outperform holiday houses, suggesting that fears over the effect of regional tensions on Cyprus’ tourism-led property market have so far failed to materialise.
Larnaca emerges as a key hotspot
Larnaca is the market to watch. It led the growth in apartment prices and also recorded the strongest rise in office values. Warehouses performed well in both Larnaca and Paphos, showing that demand is spreading beyond the traditional residential and holiday markets.
However, commercial property is mixed. Offices recorded moderate gains and warehouses continued to improve, but retail remained the weakest sector. Values rose modestly in most districts and fell slightly in Famagusta, suggesting that investors are becoming more selective.
Transaction activity gives another indication of the market’s strength. Cyprus Sotheby’s International Realty reports that 4,622 transactions worth €1.38bn took place during the second quarter, describing it as the strongest second quarter since 2016.
Cyprus property market benefits from rising new supply
Construction is responding to demand. Official figures show that 7,131 building permits were authorised for new dwelling units in the first four months of 2026, up 65% from a year earlier. Apartment blocks accounted for most of the increase, with permitted units up 85.9%.
Although the increase in supply of new dwelling units is welcome, it will take time to reach buyers and tenants. Construction costs are still rising. The Statistical Service reported that construction material prices were 3.12% higher year on year in June.
There are also wider economic risks. In June, the Central Bank of Cyprus said that economic sentiment had weakened in the second quarter, partly because of developments in the Middle East. Yet the property market continued to show strength.
For overseas buyers, the message is clear: Cyprus remains a strong but increasingly selective property market. Apartments, holiday homes and well-located properties are attracting the greatest interest. Larnaca, in particular, is emerging as a serious rival to the island’s established property hotspots.
The Q2 figures point to resilience rather than a property boom. Demand remains strong, supply is improving and rents continue to rise. But higher construction costs, affordability pressures and geopolitical uncertainty mean buyers and investors will need to focus closely on a property’s location, its quality and its potential long-term value.
