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Cyprus construction sector: Strong growth in 2025

Nigel Howarth
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Cyprus construction sector: Strong growth in 2025

Cyprus’ construction sector recorded a robust performance in 2025, underpinned by strong demand for residential development and significant growth in the number of dwelling units approved.

According to the latest data released by the Statistical Service, a total of 819 building permits were authorised in December 2025 alone. These permits correspond to a total value of €415.4 million and a combined area of 328,800 square metres, providing for the construction of 1,770 residential units.

For the full year, 8,159 building permits were issued between January and December 2025, compared with 6,827 permits in 2024, representing an annual increase of 19.5%.

Cyprus construction permits 2025

Double-digit growth in construction value & floor area

Construction momentum was further reflected in the value and scale of approved projects. The total value of permits rose by 37.8%, while the total authorised floor area expanded by 41.0% year-on-year.

Residential construction continues to dominate development activity, with authorised residential floor area increasing by 45.4% in 2025 compared with the previous year.

Meanwhile, the value of residential building permits climbed 43.7%, highlighting sustained investment appetite in the housing market.

Apartment construction drives housing supply

The number of approved dwelling units rose significantly in 2025, increasing by 42.7% compared with 2024.

Apartment buildings accounted for the largest share of new supply, with approvals for residential apartment blocks rising 51.6% to 10,791 units. Approvals for single houses increased 39.8%, while buildings containing two housing units rose 48.8%.

By contrast, mixed residential and commercial apartment blocks recorded a decline of 58.3%, suggesting developers are prioritising purely residential schemes amid continued housing demand.

Mixed performance across non-residential segments

While residential construction surged, non-residential building permits declined 20.0% in number, despite recording a 19.8% increase in authorised floor area and a 29.3% rise in value.

Civil engineering projects increased 22.6% in number, although their overall value decreased slightly by 3.9%. Road construction activity recorded a decline both in permit numbers (-21.9%) and value (-17.0%).

Planning reform and digitalisation reshape permit process

The Statistical Service notes that, from 1 July 2024, responsibility for issuing building permits transferred from municipalities and district administration offices to newly established District Local Government Organisations (DLGOs).

Permit applications are now processed through the integrated digital licensing platform “Ippodamos“, a reform designed to modernise and streamline planning procedures. The new system is expected to improve efficiency, transparency and consistency in the permitting process.

Outlook for the Cyprus property market

The sharp increase in residential approvals signals continued confidence in Cyprus’ property sector, supported by demographic demand, investment inflows and structural reforms to planning administration.

With housing supply expanding at pace and the licensing framework undergoing modernisation, the construction sector appears well positioned to sustain growth momentum into 2026, although performance across non-residential segments remains uneven.

However, as we reported last month, the Property Developers Association has warned that authorising building permits is taking longer than the time needed to construct a project.

Consultation urged on non-EU nationals buying Cyprus property

Nigel Howarth
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Consultation urged on non-EU nationals buying Cyprus property

The Cyprus Chamber of Commerce and Industry (CCCI) has urged authorities to engage in meaningful consultation with stakeholders before moving forward with property legislation that would significantly reshape the country’s real estate landscape.

The proposed law, which regulates the acquisition of immovable property by non-EU nationals, is raising concerns within the business and investment community about potential unintended consequences for the property market.

The Chamber warned that introducing regulatory changes without comprehensive dialogue could affect Cyprus’ competitiveness as an international investment destination. According to the CCCI, policy decisions impacting such a crucial sector must be carefully evaluated to ensure they do not disrupt economic growth or weaken investor confidence.

Proposed limits on non-EU property buyers

The bill, submitted by AKEL and presented before the House plenary on 2 April, introduces stricter conditions on property ownership for non-EU nationals. Among its key provisions are a prohibition on foreign buyers acquiring agricultural or forest land, as well as a restriction limiting foreign nationals to the purchase of just one residential property.

The legislation also aims to close existing loopholes that have enabled multiple acquisitions through corporate structures, a practice that has drawn criticism amid concerns about affordability pressures in certain segments of the housing market.

Rising property prices drive policy debate

According to data referenced by House Interior Committee chairman Aristos Damianou, approximately half of land transactions in Cyprus involve third-country nationals. The increase in foreign demand, particularly in urban areas, has coincided with significant property price growth, intensifying debate around market accessibility for local buyers.

While the business community broadly supports transparency and well-regulated investment activity, concerns remain that overly restrictive measures could deter legitimate investors, especially from key markets in the Middle East and Asia.

Impact on investment climate and international image

The CCCI emphasised that any legislative reform affecting property acquisition has wider implications for investment flows, economic competitiveness and Cyprus’ reputation as a stable international business hub. In a statement, the Chamber highlighted the importance of evidence-based policymaking, particularly given the current global economic uncertainty.

Stakeholder engagement, it said, is not merely procedural but essential for achieving balanced regulation that safeguards both market stability and long-term economic development.

Call for structured dialogue before parliamentary vote

The Chamber has called for the draft framework to be submitted to competent bodies for detailed examination and sufficient consultation time before any parliamentary vote takes place. It has also expressed readiness to meet immediately with the relevant committee to present recommendations on behalf of the business community.

As Cyprus continues to navigate housing affordability challenges while maintaining its attractiveness to international investors, the outcome of the proposed legislation is expected to shape the trajectory of the real estate market in the months ahead.

Cyprus property foreclosure laws face constitutional uncertainty

Nigel Howarth
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Cyprus property foreclosure laws face constitutional uncertainty

Cyprus’ Parliament has approved a sweeping package of legislation affecting property foreclosures, borrower protections and debt restructuring, despite government warnings over potential constitutional conflicts and fiscal risks.

The marathon plenary session, marked by procedural clashes between MPs, saw lawmakers pass two government bills and ten out of nineteen legislative proposals aimed at reshaping the legal framework governing property repossessions, financial disputes and guarantor liability.

The scale of legislative activity highlights the political sensitivity of foreclosures in Cyprus, particularly amid a challenging pre-election environment in which parties sought to demonstrate tangible relief for indebted households.

However, legal uncertainty now looms over the reforms, as concerns regarding constitutionality could prevent several provisions from being signed into law.

Constitutional concerns over property foreclosure measures

Government officials had cautioned that several parliamentary amendments risk breaching constitutional safeguards, particularly regarding property rights, contractual certainty and separation of powers.

The warnings raise the possibility that President Nikos Christodoulides may decline to sign a significant portion of the legislation, referring disputed provisions to the Supreme Court for review.

Several foreclosure measures appear to overlap or conflict with existing statutes, potentially complicating implementation and increasing the likelihood of judicial scrutiny.

Legal observers note that constitutional challenges often arise where legislative intervention alters contractual obligations retrospectively or restricts enforcement mechanisms relied upon by lenders.

Key foreclosure changes approved by parliament

Among the most significant provisions adopted by MPs are measures intended to strengthen borrower protections and limit creditor recovery mechanisms.

Approved reforms include:

  • Prohibition on additional interest charges once total debt reaches double the original loan amount
  • Creation of specialised judges for financial disputes, with authority to suspend foreclosure proceedings for up to 24 months
  • Legal right for borrowers to seek suspension of foreclosure where debt amounts or contract terms are contested
  • Limitation of guarantor liability to the value of the initial loan
  • Write-off of remaining debt balances where foreclosure proceeds fail to cover outstanding obligations
  • Ban on requests for additional collateral where the mortgaged property sufficiently secures the loan
  • Ability to set a minimum sale price at 50% of property value in repeat auctions
  • Temporary suspension of foreclosures on primary residences valued up to €350,000 until August
  • Strengthening of the insolvency framework

While these provisions aim to correct perceived imbalances between lenders and borrowers, some legal experts argue they may interfere with contractual enforcement rights protected under constitutional law.

Divisions over borrower court access

Cyprus Finance Minister Makis Keravnos stressed that legislative reforms must avoid constitutional inconsistencies and preserve fiscal stability.

Although the government expressed support for selected reforms, it opposed several parliamentary proposals expanding borrowers’ ability to seek court-ordered foreclosure suspensions, arguing they could undermine legal certainty and delay enforcement proceedings.

Despite these concerns, political parties broadly welcomed the reforms.

AKEL described the approval of borrower appeal rights as a “victory for society”, arguing the measures would prevent the loss of property assets to banks and credit-acquiring firms.

DIKO similarly welcomed provisions allowing courts to suspend foreclosure notices for up to twelve months, providing time for negotiation or out-of-court settlement between borrowers and lenders.

Supporters claim the reforms protect responsible borrowers while discouraging strategic default behaviour.

Legislative timeline and Supreme Court review risk

Under constitutional procedures, the President has fifteen days from notification to decide whether to sign the laws, refer them back to Parliament for reconsideration or submit them to the Supreme Court for constitutional review.

Parliament must then decide within a further fifteen days whether to accept any referrals.

With the House scheduled to dissolve on the 23rd of this month ahead of elections, the narrow legislative timeframe increases uncertainty over which provisions will ultimately take effect.

Measures unlikely to face constitutional challenge

Two government-backed bills are expected to proceed without significant legal obstacles.

These include provisions enhancing the authority of the Financial Ombudsman and enabling binding decisions in disputes involving claims of up to €20,000.

Additional reforms allow earlier recourse to the Ombudsman following receipt of a formal default notice and introduce the option of structured personal repayment plans prepared by insolvency advisers as a last resort to prevent repossession of primary residences.

Nevertheless, the Financial Ombudsman has expressed reservations that expanded responsibilities could risk transforming the institution into a preliminary stage of litigation rather than an alternative dispute resolution mechanism.

Outlook for Cyprus property market

The legislative package represents one of the most substantial attempts in recent years to rebalance relations between borrowers, lenders and credit servicing firms in Cyprus’ property market.

Yet constitutional uncertainty continues to cast a shadow over the reforms, leaving lenders, investors and property owners awaiting clarity on the final legal framework governing foreclosures.

Until presidential decisions and potential Supreme Court rulings are delivered, the extent to which these reforms will reshape Cyprus’ real estate risk landscape remains unresolved.

New foreclosure laws boost borrower protections in Cyprus

Nigel Howarth
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New foreclosure laws boost borrower protections in Cyprus

Cyprus has moved to strengthen protections for mortgage borrowers after Parliament approved a package of legislative changes aimed at improving safeguards against foreclosure and property repossessions.

The reforms, passed amid political debate, are expected to reshape the legal landscape governing foreclosures and financial disputes tied to real estate.

Stronger legal framework for borrowers

The plenary session approved two government bills alongside ten legislative proposals designed to reinforce the legal framework protecting borrowers at risk of losing their homes.

Lawmakers backed amendments to legislation governing the Financial Ombudsman, enhancing the mechanism for confirming eligible borrowers’ debt and allowing for restructuring options. The reforms also make decisions issued by the Financial Ombudsman binding in consumer complaints involving financial institutions where disputes do not exceed €20,000. However, it allows banks to appeal the decision and introduces the option of establishing a personal repayment plan aimed at safeguarding the borrower’s primary residence.

Borrowers will now be able to approach the Financial Ombudsman earlier in the process to verify mortgage debt, following receipt of a Type “I” notification letter rather than the later Type “IA” letter required under previous legislation.

Faster court procedures for foreclosure cases

A proposal to amend the Courts Law introduces the possibility for the Supreme Court to issue directions enabling specialised judges to handle financial disputes, including foreclosure cases.

Under the new provisions, district courts are expected to adjudicate foreclosure-related cases within 12 months, with the possibility of a further 12-month extension where necessary. The timeframe for debtors to file legal action following notification has also been extended from 45 to 75 days.

Better access to courts for mortgage disputes

Parliament also approved legislative changes enabling borrowers and other interested parties to seek court intervention to suspend foreclosure proceedings in specific circumstances. These include disputes over the outstanding debt amount or allegations of unfair contractual terms in loan or mortgage agreements.

Several proposals seeking broader access to courts were either rejected or withdrawn following debate among political parties.

Protections for guarantors and vulnerable borrowers

Lawmakers unanimously approved provisions ensuring that guarantors’ liability will not exceed the amount of the original loan if mortgaged property is sold or repossessed.

Additional measures aim to protect vulnerable borrowers and family homes, including a temporary suspension of foreclosure procedures for primary residences valued up to €350,000. New rules also prevent lenders from demanding additional collateral where the mortgage already sufficiently covers the loan value.

Debt write-offs and interest limits introduced

Among the most significant changes is the introduction of provisions allowing any outstanding balance to be written off where the proceeds from the sale of mortgaged property fail to fully cover the total debt.

Further reforms prevent credit institutions from charging additional interest once the total amount owed reaches twice the original loan value.

Insolvency framework adjustments

Parliament also approved amendments to insolvency legislation aimed at removing structural barriers that previously prevented certain individuals from accessing personal repayment plans or debt relief mechanisms.

Implications for the Cyprus property market

The legislative package represents one of the most substantial reforms to Cyprus’ foreclosure framework in recent years. By strengthening borrower protections while maintaining lenders’ ability to recover debts, the changes are expected to influence both lending practices and property market stability.

Industry observers suggest the reforms could improve transparency in mortgage disputes and offer greater certainty to homeowners navigating financial difficulties, while also reshaping risk assessment across the real estate sector.

Cyprus housing debate risks targeting the wrong culprit

Yiannis Misirlis
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Cyprus housing debate risks targeting the wrong culprit

In every housing cycle, markets search for a villain. Today, in Cyprus, the spotlight has turned toward foreign, particularly non-European, buyers.

The policy response now under discussion, namely stricter limitations on property sales to non-Europeans, reflects a familiar instinct: when prices rise and affordability tightens, constrain demand.

It is an instinct that is politically understandable but economically misguided.

The evidence, both international and local, points to a far less convenient truth. Price formation in residential real estate is not primarily driven by marginal categories of buyers, but by structural imbalances between supply and demand. In Cyprus, those imbalances are increasingly pronounced.

Over the past decade, demand for housing has been underpinned by several durable forces: steady population growth, inward migration of skilled professionals, the expansion of services and technology sectors, and a cultural preference for home ownership. These are not transient dynamics. They form the backbone of the market.

Supply, by contrast, remains slow, fragmented and structurally constrained. Planning delays, zoning rigidities, rising construction costs, exacerbated by persistently high energy prices, and a limited pool of skilled labour have combined to create a system that cannot respond quickly to demand. Development cycles are long; delivery is slower still.

In such an environment, even moderate increases in demand translate into disproportionate pressure on prices.

Foreign buyers, including non-Europeans, operate within this broader context. They do not define it. Their presence is often concentrated in specific segments of the market, particularly higher-end developments or projects with international appeal. Their share of total transactions, while visible, is not dominant in determining overall price levels.

To suggest otherwise is to confuse visibility with causality.

Restricting non-European buyers may, at the margin, reduce demand in certain segments. But it will not address the fundamental constraint: insufficient housing supply relative to underlying need. Indeed, such restrictions risk introducing unintended consequences.

They may undermine Cyprus’ attractiveness as an investment and business destination at a time when the economy is increasingly reliant on international capital and talent.

They also risk distorting market signals, discouraging development in segments that cross-subsidise broader residential supply.

Moreover, they create the illusion of action while leaving the structural problem untouched.

There is a deeper risk: policy misdiagnosis.

Housing affordability is a complex, system-wide challenge. It cannot be resolved through selective demand suppression without impairing market function. The real levers lie elsewhere, in accelerating permitting processes, enabling higher-density development where appropriate, investing in infrastructure, and fostering public-private collaboration to increase supply at scale.

Cyprus does not suffer from an excess of demand. It suffers from a deficit of delivery.

Blaming foreign buyers may offer a politically expedient narrative. But it does not build homes. And in the absence of a credible strategy to expand supply, prices will continue to reflect the same emphasising imbalance, regardless of who is allowed to buy.

In housing, as in economics more broadly, markets are rarely moved by the most visible actors. They are shaped by the deepest constraints.

About the author

Yiannis Misirlis is chairman of the Cyprus Property Developers Association

CM

Cyprus introduces FDI screening law for third-country investors

Nigel Howarth
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Cyprus introduces FDI screening law for third-country investors

Third-country investors seeking to acquire assets in Cyprus – including some real estate – must now secure approval from the Ministry of Finance before completing certain transactions, following the implementation of a new Foreign Direct Investment (FDI) Screening Law on 2 April 2026.

The legislation introduces a formal review mechanism enabling authorities to examine selected overseas investments prior to completion, marking a significant shift in how international capital enters the Cypriot market.

Online application portal launched

In a joint announcement, the Ministry of Finance and the Deputy Ministry of Research, Innovation and Digital Policy confirmed the simultaneous launch of a dedicated online application service. Investors and authorised representatives can submit required information and supporting documentation electronically via the government portal.

A specialised “Foreign Direct Investment Screening” section is now available for third-country national, providing guidance on eligibility criteria, application requirements and compliance obligations.

Aligning Cyprus with EU investment protection standards

The new framework brings Cyprus into closer alignment with European Union practices, many of which already operate similar review mechanisms to safeguard national security and public order. Authorities emphasised that the screening process is intended to provide clarity and transparency rather than deter investment activity.

Officials say the introduction of clearer regulatory guardrails may ultimately strengthen investor confidence by ensuring a more stable and predictable business environment.

What the changes mean for real estate investors

While the law does not apply to every real estate transaction, third country nationals involved in acquiring qualifying investments must notify the Ministry of Finance before completing deals. Failure to comply may lead to delays or regulatory complications.

For the property sector, the reform signals closer monitoring of strategic acquisitions and greater emphasis on due diligence. Market analysts suggest the framework could encourage more sustainable long-term investment patterns, particularly in high-value real estate and infrastructure assets.

Third-county investors are advised to review the new requirements carefully to ensure transactions proceed smoothly under the updated legal framework.

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