Cyprus Real Estate Market Overview 2024

The Cyprus real estate market continues to thrive, offering unparalleled opportunities for investors and homebuyers.

From its strategic location in the Mediterranean to its robust legal framework and high quality of life, Cyprus has cemented its position as a leading destination for real estate investment.

In This article, Square One will help you explore the key trends, market activity, and factors driving growth in the sector.

Cyprus at a Glance

Cyprus, an island in the heart of the Mediterranean, has become a globally sought-after relocation destination.

This idyllic paradise combines rich history, stunning landscapes, and an excellent quality of life, offering a unique blend of culture, beauty, and opportunity.

Key attributes include:

• Mediterranean charm: A Mediterranean climate with approximately 300 sunny days annually.
• Strategic location: A hub for international business and travel, situated at the crossroads of Europe, Asia, and Africa.
• High quality of life: One of the world’s best climates and among the safest countries globally.
• Investment opportunities: A favorable tax environment.
• Human capital: A well-educated workforce supported by government and EU initiatives.
• Robust regulatory structure: Closely aligned with the English common law system.

1. Real Estate's Contribution to GDP

The real estate and construction sector has historically contributed between 13% and 16% to Cyprus’s GDP, making it the highest individual contributing sector.

In 2023, this sector accounted for 14% of the total GDP, increasing by €0.2 billion to reach €3.7 billion compared to 2022, primarily due to rising construction costs and inflation.

Cyprus Gross Development Product (GDP) by sector 2023

Source: Cystat

2. Real Estate Activity in Cyprus

The total value of real estate transactions reached €5.6 billion in 2023, reflecting a 1% increase.

The number of transactions rose by 4.8%, from 24,247 in 2022 to 25,417 in 2023. Limassol led in both the number of transactions (7,400) and total property sales value (€2.3 billion).

The average transaction value in Limassol was €313,000, 33% higher than Paphos’s €234,000.

Number of transactions and transaction value

Number of transactions and transaction value by district in 2023

Source: DLS, Cyprus Real Estate Review 2023, Deloitte

3. Building Permits

While there was a slight decline in new building permits during 2023, the number of dwellings and the value of permits increased, indicating a trend toward multi-unit developments and large-scale private sector infrastructure projects.

Value and number of building permits & number of dwelling units

Source: DLS, PWC Cyprus Real Estate Market

4. Foreign vs. Domestic Buyers

Nicosia and Limassol historically attract the highest volumes of domestic buyers.

In contrast, Limassol and Paphos lead in foreign buyers, with Larnaca recording significant growth in 2023.

Paphos primarily draws holiday home investments, while Limassol and Larnaca attract a balanced mix of residential and commercial investments.

Number of transactions by foreign vs domestic buyers 2023

Source: DLS, Cyprus Real Estate Review 2023, Deloitte

5. Cyprus Residential Market

Residential transactions dominated the real estate market in 2023, accounting for 61% of total transaction value (€3.4 billion) and 52% of volume (13,000 transactions).

Apartments made up 62% of the market value and 72% of transactions. Limassol accounted for 43% of residential activity by value, with €1.5 billion in sales across 3,700 transactions.

Source: DLS, Cyprus Real Estate Review 2023, Deloitte

6. Residential Property Price Index

The Residential Property Price Index (RPPI) of the Central Bank of Cyprus (CBC) (houses and apartments), which captures the behavior of residential property prices across Cyprus, has increased by 7,7% and 4,9% in years 2023 and 2024, respectively.

The above-mentioned increase is mainly attributed to the increase in apartments price index, where an increase of 10,7% and 8,4% was recorded in years 2023 and 2024, respectively.

House price index has also increased by 5,7% and 3% in years 2023 and 2024, respectively.

The upward trend in prices is mainly driven by domestic housing demand and rising construction costs.

The analysis of the apartment price index by district shows a continuing upward trend in prices, with Limassol leading, followed by Paphos with the second-highest price index value. In 2024, the apartment prices have increased as follows:

• 2,8% in Nicosia
• 9,8% in Limassol
• 11,2% in Larnaca
• 11,4% in Paphos
• 14% in Famagusta

RPPI, Apartments and Houses price index through the years

Apartments price index by district

Source: Central Bank of Cyprus

7. Rental Yields in Cyprus

Rental yields for different asset types in 2024 Q2 were as follows:

Rental yields per asset type

• Houses (2024 Q2): 3%
• Apartments (2024 Q2): 5,43%
• Retail (2024 Q2): 5,80%
• Offices (2024 Q2): 5,61%
• Warehouses (2024 Q2): 4,25%

Rental values - YoY% change per asset type

• Houses (2024 Q2 Vs 2023 Q2): increase of 5,61%
• Apartments (2024 Q2 Vs 2023 Q2): increase of 5,48%
• Retail (2024 Q2 Vs 2023 Q2): decrease of 0,84%
• Offices (2024 Q2 Vs 2023 Q2): increase of 6,56%
• Warehouses (2024 Q2 Vs 2023 Q2): increase of 1,38%

Offices recorded the highest year-on-year rental value increase, followed by houses and apartments. Retail properties showed slight decreases.

In Conclusion

The Cyprus real estate market remains a cornerstone of the country’s economy, with its strategic advantages, rising property values, and high rental yields attracting both domestic and international buyers.

By partnering with SQONE Property Partners, you can enjoy a hassle-free, end-to-end real estate investment solution tailored to your needs, ensuring a seamless experience in this thriving market.

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Credit: Nicoletta Ioannou - Financial Analyst