Cyprus Apartment Prices Surge by Nearly 11% Amid Robust Demand in Q1 2026

The residential property market in Cyprus has demonstrated remarkable resilience and growth, with apartment prices jumping by 10.8% in the first quarter of 2026 compared to the same period last year. This information comes courtesy of the Cyprus Central Bank, whose recent report confirmed the upward trajectory of property values across the island.

Strong Performance in Apartments Outpaces Houses

While the overall House Price Index rose 7.5% year-on-year, apartment prices led the charge with an impressive 10.8% increase. Houses, on the other hand, saw more moderate growth at 3%, signaling a moderating pace in that segment of the market.

Looking back over a decade, apartment prices have climbed 27% since 2010, with Limassol standing out with a staggering 53% rise, showcasing the city’s appeal among both locals and international buyers.

Foreign Demand Continues to Power Market Growth

The main driver for this price momentum remains strong interest from overseas purchasers. Although domestic buyers have contributed to demand, foreign investors account for a significant share of transactions, particularly in popular districts such as Limassol and Paphos.

Quarterly data shows the House Price Index increasing 2.3% in Q1 2026, just shy of the 2.4% growth seen at the end of 2025. Apartments grew by 2.4% quarter-on-quarter, outpacing houses, which rose by 1.5%. However, this apartment growth rate is slightly slower than in previous quarters.

Regional Variations in Price Growth

• Nicosia: House prices accelerated with a 2.8% annual rise, and apartment prices held steady at 3%.
• Larnaca: House prices soared by 8.9%, though apartment growth showed signs of moderation.
• Limassol: Apartments led with a remarkable 10.7% rise, while house price growth slowed to 9.1%.
• Paphos: Apartment price increases slowed, with houses up by 6.4%.
• Famagusta: Both house and apartment prices remained largely flat or fell slightly.

Sales and Mortgage Lending Reflect Market Strength

According to the Department of Lands and Surveys, property sales contracts climbed 13.8% year-on-year, totaling 4,709 transactions in Q1 2026 versus 4,137 in Q1 2025. Sales by foreign buyers surged by 22.3%, whereas domestic purchases also rose by 8.1%.

Limassol led in transaction volume with 1,499 contracts, followed by Nicosia (1,065), Larnaca (994), and Paphos (919). Famagusta recorded the fewest sales at 232. Domestic buyers dominated Nicosia with 84% of purchases while foreign buyers principally drove demand in Paphos, making up 75% of deals.

On the financing front, mortgage lending to households surged 24.5% year-on-year, reaching €353.6 million in new loans. Concurrently, average mortgage interest rates dipped to 3.15% in March 2026 from 3.53% a year prior, influenced by the European Central Bank’s easing stance since mid-2024.

Supply Growth Meets Cost Pressures

Housing supply is showing signs of catching up, with building permits for residential units soaring by 79.2% year-on-year in the first two months of 2026—from 1,932 to 3,463 units. Positive construction activity is expected to steadily improve market availability.

However, rising construction material prices, up 0.9% year-on-year and remaining near historic highs due to ongoing geopolitical and supply chain issues, keep upward pressure on costs. Labour shortages and elevated wages in the construction sector add another layer of challenge for developers, potentially slowing supply expansion.

Outlook: Cautious Optimism Amid Continuing Demand

Market forecasts suggest sustained price growth in the near future, with the European Commission’s property price expectations indicator increasing to 32.8 in Q1 2026 from 24.6 a year earlier. The strong foreign buyer interest, improving mortgage conditions, and constrained supply due to construction cost pressures are creating a balanced yet dynamic property landscape.

For buyers looking into more affordable options, exploring Cheap Apartments for Sale in Cyprus or Cheap Houses and Villas for Sale Cyprus listings on INDEX.cy offers valuable insights into attainable market segments amid rising prices.