In the first quarter of 2026, apartment prices across Cyprus saw a remarkable year-on-year increase of 10.8%, underscoring the island’s vibrant residential property market. This growth significantly outpaced the overall House Price Index, which climbed 7.5% compared to the same period last year, according to the latest data from the Cyprus Central Bank.
While apartments surged by nearly 11%, house prices grew by a modest 3%, suggesting a slight cooling in that sector relative to flats and apartments. The long-term trend remains clear: apartment prices are now 27% higher than in 2010, with Limassol bearing the brunt of growth with a staggering 53% rise over the same period.
The Central Bank highlights that persistent demand from overseas investors is the primary force behind rising property prices. Domestic buyers contribute as well, but to a lesser extent. Additional upward pressure stems from ongoing increases in construction costs, linked to global supply chain challenges and geopolitical factors. Despite these cost pressures, the housing supply is gradually expanding, reflecting more building projects entering the pipeline.
Price performance varies by district. Nicosia and Larnaca led house price growth with 2.8% and 8.9% increases, respectively, while Limassol and Paphos saw their growth rates moderate to 9.1% and 6.4%. Famagusta experienced little change quarter-over-quarter. Apartments showed their strongest gains in Limassol (+10.7%), with other districts like Larnaca, Paphos, and Famagusta seeing a slower pace of growth. Nicosia maintained a steady 3% annual rise in apartment prices.
The Department of Lands and Surveys reported a 13.8% surge in total property sales contracts year-on-year for Q1 2026, reaching 4,709 transactions. Foreign buyers led the charge with a 22.3% increase to 2,044 purchases, while domestic buyers grew their acquisitions by 8.1% to 2,665 units.
Limassol remains the hotspot with 1,499 sales, followed by Nicosia (1,065), Larnaca (994), and Paphos (919). Famagusta saw the lowest volume of transactions at 232. Interestingly, domestic buyers dominate in Nicosia (84%) and maintain a solid presence in Limassol and Famagusta (around 60%), whereas foreign investors control 75% of the Paphos market. For those exploring affordable options, consider checking Cheap Apartments for Sale Cyprus.
Mortgage lending continues to gain momentum with net new loans rising 24.5% year-on-year to €353.6 million. The average mortgage interest rate dropped to 3.15% in March 2026 from 3.53% a year earlier, reflecting a trend of easing borrowing costs that supports demand. Although lending standards remain strict, banks anticipate steady mortgage demand entering Q2 2026.
Building permits for new residential units surged by 79.2% in the first two months of 2026 compared to last year, signaling a forthcoming rise in available housing stock. The European Commission’s construction activity indicators corroborate this positive expansion, marking the tenth consecutive quarter of growth in the sector.
Yet, construction material prices remain elevated, inching up 0.9% year-on-year and staying near record highs due to ongoing supply challenges. Labour shortages in the construction industry have also pushed wages above pre-pandemic levels, compounding costs for developers and potentially limiting supply growth.
Market sentiment points to sustained residential price increases. The European Commission’s property price expectations index climbed to 32.8 in Q1 2026 from 24.6 a year prior, signaling increasing optimism among investors and homebuyers alike.
Despite the gradual climb in housing availability, Cyprus’s property market continues to be buoyed by strong foreign demand, favourable mortgage conditions, and persistent cost inflation in construction.
For those seeking diverse property opportunities, explore the extensive listings of Cheap Houses and Villas for Sale Cyprus or browse the latest additions in Apartments across the island.
Ultimately, Cyprus remains an attractive but dynamic market where buyers should balance rising prices with an expanding but cost-pressured supply landscape.
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