Cyprus building activity rises 45.5% in early 2026

Nigel Howarth
-
0
Cyprus building activity rises 45.5% in early 2026

Cyprus building activity rose 45.5% in the first four months of 2026, with approved projects covering 1.35 million square metres. The increase was driven mainly by residential construction, while non-residential development declined.

Residential building floor area rose 66.9% to 1.23 million sqm, from 738,562 sqm a year earlier. Civil engineering projects also recorded strong growth, with approved floor area jumping 844.7% to 17,231 sqm.

By contrast, non-residential building area fell 46.4% to 100,562 sqm.

Cyprus residential construction and new housing developments in 2026
Cyprus building activity surged in early 2026, led by residential construction.

Larnaca leads growth

Larnaca district recorded the strongest increase. Approved project floor area reached 290,400 sqm, up 168.3% from 108,200 sqm in the first four months of 2025. It was also 223.8% above the 2019 level.

Paphos followed, with approved floor area rising 99.0% to 141,200 sqm. Nicosia recorded the largest total area at 489,400 sqm, up 63.8% year on year.

Limassol saw more modest growth of 2.6%, reaching 401,000 sqm. Famagusta was the only district to record a decline, with approved floor area falling 51.7% to 28,600 sqm.

Across Cyprus, approved project floor area was 93.3% higher than in the first four months of 2019.

Building permit value up 46.1%

The total value of building permits reached €1.671 billion, up 46.1% from €1.144 billion in the same period of 2025.

Residential permits accounted for much of the increase. Their value rose 66.6% to €1.429 billion.

The number of building permits also increased. Authorities issued 2,915 permits, up 35.1% year on year. Residential permits rose 33.6%, while land subdivision permits increased 72.0%.

In April alone, 639 permits were issued, covering 335,300 sqm and providing for 1,728 residential units.

New housing supply jumps 65%

The number of residential units covered by permits rose 65.0% to 7,131 in the first four months of 2026, from 4,321 a year earlier.

Apartment buildings recorded the strongest growth. The number of units rose 85.9% to 5,184, compared with 2,789 in 2025. Detached houses increased 23.3%, while semi-detached homes rose 14.2%.

Cyprus commercial property market in 2026

Nigel Howarth
-
0
Cyprus commercial property market in 2026

Cyprus’ commercial property market remained on a positive track in the first half of 2026, with offices and warehouses recording notable gains in both values and rents. Retail property, however, continued to show the weakest growth despite a strong rise in consumer spending.

According to Danos’ Cyprus Market Insight Report S1 2026, economic growth, the expansion of the services sector and business relocations are supporting demand. Limited supply of new, high-quality commercial space is also helping to underpin the market.

At the same time, inflation returned to 4% in June, reducing the scope for further interest rate cuts. However, this did not weaken demand for high-quality commercial property.

Office market continues to grow

The office market recorded another period of steady growth, without showing signs of overheating.

Capital values for offices rose by 2.91% year on year in the first quarter of 2026. Rents increased by 3.03%, the second-highest rise among all property types after apartments.

Office yields remained broadly unchanged at 5.60%. Danos said this points to a stable market, with growth driven by occupier demand rather than speculative investment.

Demand continues to come mainly from technology, professional services, financial services and shipping. These sectors are also among the key drivers of Cyprus’ wider economy.

Danos also highlighted a growing ‘flight to quality’ among occupiers. Businesses are increasingly seeking modern, energy-efficient Grade A buildings, leaving older offices facing longer vacancy periods.

Limassol remains the most expensive office market

Limassol continues to be Cyprus’ most expensive office market.

Prime office rents stand at about €29 per sq m per month, the highest level in the country. Demand is supported by the city’s concentration of international companies, shipping businesses and technology firms.

Nicosia remains the largest market by transaction volume and available stock. It offers a wider choice of properties and lower average rents, while Paphos and Larnaca remain smaller but stable markets.

The limited supply of new Grade A offices, particularly in Limassol, remains a key factor supporting both rents and capital values.

Retail property remains the market’s weak spot

Retail property is showing a different trend from the rest of the commercial market.

Danos describes this as the ‘retail paradox’. Retail sales are rising strongly, but the property market is failing to match that growth.

In May 2026, retail turnover increased by 9.8% in value and 7.5% in volume. Yet shop capital values rose by only 0.72%, while rents increased by just 0.66%.

That was the weakest performance among all property categories. Retail property yields remained stable at 5.77%.

Danos said the gap reflects the impact of e-commerce, a more cautious approach among investors and limited scope for further rental growth, despite stronger consumer activity.

Wide differences between retail locations

Location remains a major factor in Cyprus’ retail property market.

On Limassol’s prime high-street locations, rents average about €39 per sq m. For the best-performing shops, rents can reach as much as €94 per sq m.

By contrast, most rents in Nicosia and Larnaca range from €12 to €18 per sq m. Secondary locations are seeing little or no growth in capital values.

According to the report, the strongest retail performance continues to be concentrated on Limassol’s main shopping streets and in major organised shopping centres.

Warehouses lead commercial property growth

The warehouse and logistics sector continues to show the strongest momentum among Cyprus’ commercial property markets.

Capital values increased by 3.48% year on year, while rents rose by 2.58%. Warehouse yields edged down to 4.20%, the lowest level among all commercial property types.

Danos said the lower yield reflects strong investor interest in the sector.

Supply remains limited. Limassol accounts for about 47% of available warehouse stock, followed by Nicosia with around 33% and Larnaca with 20%.

Limassol also remains the most expensive market for warehouse space, with rents of about €7 per sq m. The national average is around €5 per sq m, while Larnaca remains the cheapest option at about €3 per sq m.

Danos expects demand to remain strong, supported by the growth of e-commerce, rising supply chain requirements and the strategic role of the Port of Limassol.

Modern warehouses are therefore expected to remain one of the most attractive parts of Cyprus’ property market during the second half of 2026.

Cyprus plans major overhaul of forced property sales

Nigel Howarth
-
0
Cyprus plans major overhaul of forced property sales

Cyprus is set to overhaul the rules governing forced property sales, with new measures aimed at speeding up auctions and bringing greater certainty to the process.

A government proposal prepared by the Department of Lands and Surveys would introduce private property valuers, automatic reductions in reserve prices and a limit on the number of auctions for certain undivided properties.

The draft legislation is currently out for public consultation until 8 September. If approved, it would bring significant changes to how the reserve price of a property is set and how unsuccessful auctions are handled.

What is a forced property sale?

A forced property sale can take place when a property owner has an outstanding court judgment and a warrant for the sale has been issued. It can also arise when a property is mortgaged and the lender exercises its rights under Cyprus mortgage and foreclosure legislation.

Other legislation or a court decision can also require a property to be sold.

The rules are designed to balance the rights of creditors with protection for property owners. In particular, the reserve price is intended to prevent a property being sold at an exceptionally low price.

Private valuers brought into the process

One of the biggest changes would be the introduction of private property valuers.

Under the proposed system, the applicant would appoint a private valuer after receiving notification from the relevant District Land Office. The valuer would determine the property’s market value and recommend the reserve sale price in a formal valuation report.

The move is intended to take some of the pressure off the Department of Lands and Surveys and speed up the process.

A fee schedule for private valuers would be established and approved by the Director and the Cyprus Scientific and Technical Chamber’s Association of Valuers, ETEK. Fees would normally be reviewed every five years, unless there are grounds for an earlier change.

Reserve price would fall by 15%

The proposals would also introduce a clear financial penalty for failed auctions.

If a property fails to sell, the reserve price for subsequent sales held within five years of the first unsuccessful auction would be reduced by 15%.

The change would replace a less predictable approach with a fixed reduction. It could make properties more attractive to potential buyers after an unsuccessful auction.

The reserve price remains the minimum amount at which the property can be sold.

Fresh valuation after five years

Property values can change significantly over time. The proposed legislation recognises this by introducing a five-year period for valuations.

After five years have passed from the date of the original valuation, the District Land Office official could require the applicant to submit a new valuation and a new reserve price.

There would, however, be an exception where the property’s value has already been materially affected by a significant change in its physical or legal status, or by another factor.

Two-auction limit for undivided properties

The government also wants to tackle lengthy cases involving undivided properties.

Under the proposed changes, certain applications under Article 28 would be limited to two unsuccessful auctions.

If the property has failed to sell twice and five years have passed since its valuation, the application would be set aside. The applicant would then be asked whether they want to start the process again.

The aim is to prevent cases from remaining open indefinitely.

New application could be made

An applicant who still wants to sell the property could submit a new application. It would then be considered under Article 27 of Chapter 224.

The application could only proceed if the property still cannot be divided under the relevant legal provisions.

This is particularly important for undivided properties, where the sale process can become complicated and prolonged.

Existing cases could also be affected

The draft legislation contains transitional provisions that could bring some existing cases under the new rules.

Where a reserve price has already been set under the current law but the forced sale has not yet been completed, the sale would be treated as taking place under the new legislation.

A faster route to auction?

The proposed reforms could mark a major shift in Cyprus’s approach to forced property sales.

Private valuers would take on a larger role. Reserve prices would fall by a set 15% after an unsuccessful auction. Certain undivided properties would face a maximum of two auctions before an application is set aside.

For creditors, the changes could mean a faster route to sale. For buyers, clearer pricing rules could make forced property auctions easier to assess.

For property owners, however, the reforms could increase the pressure to resolve disputes and debts before a property reaches auction.

Note that the proposals are not final. They remain subject to public consultation and the wider legislative process. The final rules could therefore change before they come into force.

Cyprus housing fund raises €20m for affordable homes

Nigel Howarth
-
0
Cyprus housing fund raises €20m for affordable homes

Cyprus’ Land Development Corporation (KOAG) has raised more than €20m by selling additional building density to property developers. The money will be used to build 250 residential units, which will either be offered at affordable rents or sold at a reduced price of €1,650 per square metre.

For an 80 sqm flat, the expected purchase price would be about €132,000. That compares with more than €180,000 for similar-sized flats in some parts of Cyprus, depending on the location.

Developers can pay instead of providing affordable homes

The €20m has been raised under Cyprus’ Affordable Housing Units Management Scheme. The scheme allows developers to increase the permitted building density of their projects. In return, they are normally required to provide some homes at affordable prices.

Some developers have instead chosen to pay the value of the additional building density they received. This allows them to sell all the homes in their developments at market prices while avoiding the obligation to provide discounted units through KOAG.

The option may appear more expensive at first. However, rising property prices mean that some developers see a financial advantage in paying the contribution and selling all their homes at market rates.

147 affordable homes expected from the scheme

Developers who use the building-density incentive and meet the affordable housing requirement are expected to provide homes for sale at €1,650 per sq m. KOAG estimates that 147 units will be created through this part of the scheme.

Affordable rental homes will also be offered at a discount. Rents are expected to be 30% below the average market rent in the area, based on market assessments by the Department of Lands and Surveys.

KOAG will also rent out its own homes at 30% below market levels. The organisation is considering an even larger discount in Limassol, where rental costs have risen particularly sharply.

Limassol rents could be cut further

The situation is particularly difficult in Limassol, where rents have risen sharply and many households are struggling to find suitable accommodation. KOAG is therefore considering offering some of its homes at an even larger discount.

The organisation’s director general, Eleni Simeonidou, said the possibility of a 40% reduction was being considered for Limassol. She said the city had its own particular housing pressures and that the level of any additional discount would be decided later.

KOAG is also considering allocating more of its new homes to affordable renting rather than affordable ownership. The reason is straightforward: some households cannot afford to buy a home, even when the property is offered below prevailing market prices.

245 homes are already being built

KOAG currently has 245 residential units under construction. A further 100 units are intended for affordable rental, while the organisation is also expected to make use of 135 plots of land.

KOAG has been looking at different ways to reduce the cost of delivering affordable homes. One option was to buy partly completed residential and tourism developments that had ended up with banks and property management companies.

However, the idea did not move beyond the planning stage. Some of these developments had planning permissions that had expired many years ago. There were also questions about their structural condition and whether they had been built to the relevant earthquake safety standards.

In some cases, demolition and rebuilding could have been necessary. KOAG concluded that starting new developments would be more economical than trying to repair or complete problematic buildings.

Affordable rental homes planned in Strovolos

KOAG has bought land from several property management companies at relatively favourable prices. The sites are in Strovolos and will be used to build affordable rental homes.

The organisation also considered buying good-quality prefabricated homes, but that option was eventually rejected. One advantage was that planning approvals could have been obtained around six months faster than for conventional buildings. However, construction costs would not have been significantly lower, so the proposal was abandoned.

KOAG becomes a key part of Cyprus housing policy

KOAG has become a central part of the Cyprus Government’s housing policy. The organisation, either directly or through its supervision, is involved in delivering many of the state’s housing programmes.

The Government is also relying on planning incentives to encourage private developers to increase housing supply and contribute to the affordable housing market.

Government targets 10,000 new homes

Interior Minister Konstantinos Ioannou recently told MPs that government housing measures and planning incentives could help lead to the construction of 10,000 new residential units.

The target includes homes delivered through state housing programmes and developments by private-sector companies using government planning incentives. One of the measures allows building density to rise by up to 45%.

So far, 47 applications have been submitted under the scheme. They represent more than 2,500 residential units, including around 400 affordable homes.

Developers who do not want to provide the affordable units can instead pay an amount linked to the additional building density they receive. The contribution was initially about €17m but has now risen above €20m.

Thousands of homes could enter the market

The Government has also highlighted its fast-track planning approval programme. Approved schemes include 930 apartment buildings and around 3,000 houses.

If each apartment building were developed with the maximum 20 flats, the potential number of new homes would be much higher. Even using a more conservative estimate of 10 flats per building, the programme could result in around 9,300 new apartments.

Together with the 3,000 houses, that represents more than 12,000 potential new homes. The figures underline the scale of Cyprus’ effort to increase housing supply and make homes more affordable.

For KOAG, the immediate priority is to deliver new homes at prices and rents that are below the increasingly expensive private market.

Cyprus housing market hits record high in 2026

Nigel Howarth
-
0
Cyprus housing market hits record high in 2026

Cyprus’ housing market confirmed its role as the driving force behind the country’s property sector in the first half of 2026, reaching a new record for both the number and value of transactions.

Demand remained strong despite a more challenging economic backdrop, with higher inflation and geopolitical tensions in the Middle East creating greater uncertainty. However, local buyers continued to support the market, while overseas buyers are still choosing Cyprus as a place to settle permanently.

According to the Cyprus Market Insight Report S1 2026 by Danos, the Cypriot economy entered 2026 from a position of strength. The economy grew by 3% in the first quarter, the highest growth rate in the European Union. Private consumption, the services sector and business relocations continued to support property demand.

Record housing sales and values

Danos describes residential property as the leading sector of the Cyprus property market in the first half of the year. In the first quarter, 4,308 homes were sold, with the total value of these sales reaching €1.26 billion. The number of transactions rose by 43% compared with the first quarter of 2025, while their total value increased by 52%.

Strong activity continued into the spring, with transaction volumes in May also remaining above the level recorded a year earlier. The report says the key change is not simply the size of the market, but also the type of demand.

The market is gradually moving away from investment and seasonal purchases, with more buyers now looking for homes to live permanently. This includes people relocating to Cyprus and could provide a more stable base for future market growth.

Houses gain ground

One of the biggest changes is in buyer preferences. House sales increased by 63% year on year, compared with a 38% rise in apartment sales.

Danos says buyers are increasingly choosing larger homes, with space, quality of life and long-term housing needs becoming more important. This marks a shift from the smaller homes that dominated the market in previous years, when strong investment demand was a major driver.

Capital values also continued to rise across the main residential property categories. Apartments recorded the biggest increase, at 4.09%, while house prices rose by 3.60%.

Apartment rents also recorded the strongest annual growth, increasing by 5.10%. Apartment yields stood at 5.44%, keeping them attractive to property investors.

European buyers and business relocations

Overseas demand remains a key part of the Cyprus property market, although its make-up is changing. Buyers from European Union countries were the fastest-growing group, with sales contracts to EU buyers rising by about 31% in May. Demand from buyers outside the EU remained broadly stable.

Danos says Paphos has become a major centre of international interest. The end of the non-dom tax regime in the UK has also increased Cyprus’ appeal, making the island more attractive to wealthy individuals and businesses looking to relocate.

This trend is particularly strong in Limassol, which continues to attract multinational companies and corporate headquarters. Cypriot buyers remain the backbone of the market, accounting for about 63% of transactions in May. Their activity increased by around 6% compared with the same month in 2025.

Property supply still falls short

Despite strong construction activity in recent years, supply remains below demand in the most sought-after parts of the market. The biggest shortage is in modern homes and high-quality apartments, particularly in coastal and prime locations. This shortage continues to support higher property prices.

The largest price increases were recorded in Paphos and Famagusta, while Nicosia remains the country’s most stable property market.

Limassol and Paphos attract strong demand

The report also highlights the value of property transactions across Cyprus’ districts. Investment activity remains particularly strong in the country’s main urban and coastal markets.

Limassol recorded the highest transaction value in the first quarter, with sales worth about €442 million. This kept the city as Cyprus’ largest property market.

Paphos ranked second, recording about €401 million in transactions and 1,077 sales. Danos describes this as one of the most significant changes in the current property cycle.

Paphos was just 55 transactions behind Limassol, reflecting rising demand from buyers seeking permanent homes in Cyprus rather than purchasing solely for investment purposes.

Larnaca followed with about €187 million in transactions and 995 sales, while Nicosia recorded €174 million and 877 sales. Both remain more affordable markets, supported mainly by demand for owner-occupied homes and relocation.

The median apartment price was about €160,000 in Larnaca and €155,000 in Nicosia.

Investors spread across property types

Danos also highlights the largest individual transactions recorded in the first half of the year. These were mainly concentrated in Limassol and Nicosia and included office buildings, mixed-use developments and high-value residential plots. Luxury apartments and selected hotel properties also featured among the major deals.

Three trends stand out from the wider investment picture. Investment interest is spreading beyond Limassol, transactions are becoming more diverse across different property types, and buyers are becoming more selective about property quality and location. This is happening as financing costs stabilise.

Strong but more selective market expected

Danos expects investment activity to remain strong in the second half of 2026, although buyers are likely to become more selective.

The first half of the year shows that Cyprus remains a strong residential property market. Local demand continues to provide a solid foundation, while international buyers and business relocations are creating new sources of demand.

With supply still tight in key locations, the outlook for Cyprus property remains positive. The market is also becoming more focused on homes for permanent occupation, which could make the current growth cycle more sustainable over the longer term.

Cyprus construction sector: strong momentum amid rising uncertainty

Nigel Howarth
-
0
Cyprus construction sector: strong momentum amid rising uncertainty

Cyprus’ construction sector continued to perform strongly during the first half of 2026, with new research from Eurobank confirming healthy growth in development activity, investment and property demand.

Eurobank’s latest report highlights a strong pipeline of projects, rising mortgage lending and increasing property sales, showing that the market remains resilient despite growing geopolitical tensions in the Middle East.

Building permits show strong development pipeline

The construction pipeline expanded significantly during the first quarter of 2026. Building permits rose by 44% year-on-year to 2,276, while the number of approved homes increased by 58% to 5,403.

The total approved floor area reached one million square metres, up 40% from the same period last year. The value of approved developments also climbed by 41% to €1.3 billion.

These figures suggest developers remain confident and are investing in larger, higher-value projects across the island.

However, Eurobank notes that these building permit figures cover the period between January and March 2026, before the latest conflict in the Middle East escalated. Future data will provide a clearer picture of whether investor confidence remains at current levels.

Construction activity continues to grow

The report shows that construction activity remains strong across Cyprus.

Gross value added in the construction sector increased by 4.9% year-on-year during the first quarter of 2026, compared with 3.9% in the same period of 2025. This indicates that the growing pipeline of approved projects is translating into real construction work.

The construction production index also continued its upward trend, reaching 120.7 during the quarter.

Meanwhile, construction output prices rose by 4.7% year-on-year to an index level of 129.5, suggesting developers have maintained pricing power despite slower growth in production volumes.

Property market demand remains healthy

Cyprus’ property market also continued to perform well.

Sales contracts reached 10,007 during the first six months of 2026, representing a 15% increase compared with the same period last year. This builds on the strong performance seen in 2025, when annual property transactions also increased by 15%.

Demand remains strong among both local and overseas buyers.

Purchases by Cypriot nationals increased by 10%, while foreign buyer activity rose by an even stronger 23%.

Interest from European Union buyers was particularly impressive, with transactions increasing by 29%. Purchases by non-EU buyers also grew by 20%, underlining Cyprus’ continued appeal as an international property investment destination.

Importantly, property sales have remained resilient despite the recent escalation of tensions in the Middle East, suggesting regional uncertainty has not yet weakened buyer confidence.

Mortgage lending supports housing market

Mortgage lending continues to provide support to those buying property in Cyprus.

During the first five months of 2026, new mortgage lending increased by 19.5% year-on-year. This points to healthy demand for housing and suggests residential construction activity is likely to remain strong over the coming months.

Labour shortages become a growing challenge

Despite the positive outlook, the report identifies several challenges facing the construction industry.

Labour shortages have become the biggest concern for developers. Around 38% of construction firms now say a lack of available workers is their main production constraint, compared with just 11% in 2022.

Businesses are also reporting increasing uncertainty, with sentiment beginning to resemble the pattern seen during the COVID-19 pandemic. At the same time, expectations for future construction costs have continued to rise.

Outlook for the Cyprus construction sector

Overall, Eurobank believes Cyprus’ construction sector enters the second half of 2026 from a position of strength.

A strong project pipeline, rising construction activity and healthy property demand continue to support growth across the market. Although labour shortages and geopolitical uncertainty remain important risks, current indicators suggest the sector is well placed to maintain its positive momentum throughout the remainder of the year.

1...131415...703Page 14 of 703