Cyprus property prices accelerated during the second quarter of 2026, with strong demand from foreign buyers and rising construction costs continuing to push the residential market higher.
The Central Bank of Cyprus (CBC) Residential Property Price Index (RPPI) increased by 2.4% during Q2 2026, following a 2.3% quarterly increase in Q1. On an annual basis, the index rose by 8.5%, compared with 7.5% in the previous quarter.
The latest figures point to continued momentum in the Cyprus property market, despite higher construction costs and tight lending conditions.
Cyprus property prices continue to climb
The increase was driven by both houses and apartments, although their performance differed.
House prices rose by 2.5% quarter-on-quarter and were 5.8% higher than a year earlier. Apartment prices increased by 1.3% during the quarter and by 8.9% annually.
The CBC said the continuing increase in Cyprus property prices reflects strong demand for housing, particularly from foreign buyers, as well as rising construction costs.
Property prices increased in every district during Q2 2026.
Famagusta recorded the highest annual increase at 10.0%, followed by Larnaca at 9.8%, Paphos at 9.6%, Limassol at 7.8% and Nicosia at 5.7%.
Limassol was the only district where annual price growth slowed during the quarter.
Apartment prices recorded particularly strong growth in Paphos, where they increased by 18.5% year-on-year. Apartment prices also rose in Famagusta and Nicosia, while growth slowed in Limassol and Larnaca.
Foreign buyers drive Cyprus property sales
Demand for property remained strong during Q2, with the number of sales contracts rising 15.4% year-on-year.
According to Department of Lands and Surveys data, 5,298 sales contracts were registered during the quarter, compared with 4,592 during Q2 2025.
Foreign buyers were responsible for much of the increase. Purchases by foreign buyers rose by 22.7%, reaching 2,107 properties compared with 1,717 a year earlier.
Purchases by local buyers also increased, rising 11.0% to 3,191 properties.
Limassol recorded the highest number of transactions, with 1,765 sales contracts, followed by Larnaca with 1,169, Nicosia with 1,076, Paphos with 1,073 and Famagusta with 215.
Foreign buyers were particularly prominent in Paphos, accounting for 66% of transactions during the quarter.
Housing loans increase as demand strengthens
Mortgage lending also supported the property market.
New housing loans increased by 14.2% year-on-year during Q2 2026, reaching €403.6 million compared with €353.5 million during the same quarter of 2025.
The weighted average interest rate on housing loans edged down to 3.23% in June 2026, compared with 3.26% in June 2025.
However, banks continued to apply strict lending criteria. The CBC’s Bank Lending Survey indicated that demand for housing loans increased during Q2, while lending standards remained unchanged.
New housing supply is rising
While demand continues to support Cyprus property prices, there are signs that the supply of new homes is also increasing.
Residential units covered by approved building permits rose by an impressive 63.7% during January-May 2026, reaching 8,978 units compared with 5,484 during the corresponding period of 2025.
The CBC therefore expects the supply of residential units to continue increasing over the medium term.
Construction activity also remained positive during Q2, according to European Commission business and consumer survey data.
Construction costs remain a concern
Despite the increase in construction activity, the cost of building remains high.
Construction material prices increased by 2.4% year-on-year during Q2 2026, remaining at historically high levels in recent years.
The CBC attributed much of the pressure to continuing geopolitical tensions, which have disrupted supply chains and increased the cost of construction materials.
Labour shortages in the construction industry are another factor putting upward pressure on property prices, with wages in the sector remaining elevated compared with pre-pandemic levels.
Property price expectations rise sharply
There are also signs that upward pressure on Cyprus property prices could continue.
The European Commission’s June 2026 Business and Consumer Surveys showed a substantial increase in the index measuring expectations for residential property selling prices over the following three months.
The index rose to 65.9 in Q2 2026, compared with 22.2 during the corresponding quarter of 2025.
Overall, the latest CBC figures show a Cyprus residential property market experiencing strong demand, rising prices and increased construction activity. Foreign buyers remain an important source of demand, while higher building costs and labour shortages continue to influence the market.
With residential building permits rising sharply, however, developers appear to be responding to strong demand by increasing the potential future supply of homes.
Cyprus property prices entered the second half of 2026 with significant upward momentum, although the balance between strong demand, higher costs and increasing housing supply will remain crucial to the market’s future direction.
