The property market in Cyprus

7 min read

Cyprus is an island of sun, sea, and a great quality of life, so it’s not surprising that it has always been popular with people looking to relocate abroad or invest in real estate. If you’re thinking about buying a home in Cyprus, here’s our quick guide to the property market there.

6 reasons to invest in Cyprus

Investing abroad can seem like a daunting prospect, especially if it’s your first time looking for overseas property. Whether you’re seeking a second home, somewhere to relocate or want to expand your property portfolio, Cyprus is a stunning location with a lot of potential.

Here are our six top reasons for investing in this Mediterranean jewel.

  1. As part of the European Union and Eurozone, Cyprus offers the tranquillity and natural beauty of island life with all the convenience of a developed country, with easy mobility and residency rights.
  2. The island is a sun-lover’s paradise with around 320 days of sunshine every year. The hot temperatures of the summer are calmed by the sea breeze and while the winter months are cooler, you can still expect between 6 to 8 hours of sunshine per day.[1]
  3. Cyprus is renowned for welcoming foreigners and permanent residency is available to anyone who buys property valued at €300,000 or above.[2] This makes the option of relocation much easier.
  4. Tourism is a huge part of the Cypriot economy with an estimated 3.8 million foreign visitors in 2023.[3] This means there is a large demand for short-term rentals throughout Cyprus, which is great news if you’re looking to invest in a holiday property.
  5. Cyprus’ economy has shown slow but consistent growth over the years and has recovered well since the global pandemic. This is good news for foreign buyers who can feel assured their investment is safe.
  6. The landscape of Cyprus is breathtaking, with golden sand beaches, the magnificent tree-covered Troodos Mountains, caves, coves, and cliffs. The island is a true wonder of nature.

Property market overview

The property market in Cyprus has seen significant growth in the last few years and has grown in popularity with foreign investors due to factors such as favourable tax rates, permanent residency options, quality of life and demand for tourist rentals.

The Government has also been trying to make the process of buying property in Cyprus easier through policy changes and improvement in infrastructure.[4] All of this, coupled with economic stability and growth, makes the market a welcoming place for foreign cash.

Property prices vary throughout Cyprus and tend to go up in popular tourist spots, such as Limassol and Paphos. In 2023, property prices in coastal areas rose significantly: 14.9 % in Limassol, 13.4% in Larnaca and 18.5% in Paphos.[5]

Properties in rural areas are significantly cheaper and areas with less tourist demand (such as Famagusta and Nicosia) will also see lower prices.

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Northern Cyprus property market

Cyprus is divided into the Republic of Cyprus and the Turkish Republic of Cyprus (Northern Cyprus), so it’s worth looking at the two property markets individually.

 

Historically, Southern Cyprus has always been more popular with investors and people looking to relocate, but Northern Cyprus is also growing in popularity. In July 2021 the average house price per m2 was around €974, in 2023 this had increased to €1,578.[6]

 

Despite the upward trend in prices, Northern Cyprus is still affordable (and cheaper than Southern Cyprus) and with prices going up, any investment now may result in increased returns if you sell later.

 

Kyrenia is one of the most popular regions due to the pretty coastline and growing tourist market, while Iskele is also attracting more foreign investors and visitors. For more natural beauty and wildlife, Magusa is a lovely option and faces the Middle East.

Types of property

There is a large variation in the type of property available on the island from apartments to mid-price houses, luxury villas and new build properties.

 

Apartments have increased significantly in price throughout Cyprus and especially in tourist areas. Paphos particularly, has been the most popular area for property sales since 2023.[7]

 

Data shows that house prices experienced a growth of 7.6% year-on year in September 2023.[8] So it could be said, that now is the time to start your Cyprus property search before prices get even higher.

 

However, if you compare prices in Cyprus with other European countries, it is still more affordable and there are plenty of deals to be done if you’re keen to find the perfect island residence. Depending on location, houses and apartments start at around €150,000 while larger villas are priced at around €245,000.[9]

 

Properties near the beach or with onsite facilities such as a pool will require a much larger budget.

 

The below table shows the average cost of apartments in the four main areas of Cyprus in March 2024.

Area Price of city centre apartment per m2 (€) Price outside city centre apartment per m2 (€)
Nicosia 2,350 1,850
Paphos 2,183.18 1,936.50
Limassol 4,331.25 3,284.38
Larnaca 2,550 1,835.62

All data has been sourced from Numbeo and was correct at the time of publication.

Good to know

Although the demand for property is increasing, in 2023 there was a reduction in the number of building permits being issued. This means less new homes are being built, which could in turn drive prices up further. Starting your search for a Cyprus home now may save you money in the long run.

Rental market overview

The average gross rental yield in Cyprus in 2023 was 4.93%.[10]

 

With the continued growth of tourism, short term holiday lets are a good way for investors to boost their income, especially over the summer months.

 

The amount of rent you earn will depend on where you invest, with tourist regions earning more than less popular areas, as seen by the table below.

Area Property type Average monthly rent (€) Annual yield (%)
Paphos 2 bed apartment 1,000 7.05
Paphos House 1,700 5.36
Limassol 2 bed apartment 1,600 6.85
Limassol House 2,500 5.45
Larnaca 2 bed apartment 1,050 7
Larnaca House 2,000 5.71
Nicosia 2 bed apartment 700 5.25
Nicosia House 1,700 5.1
Famagusta 2 bed apartment 650 6
Famagusta House 1,300 4.72

The above data has been sourced from Greek property site Grekodom and refers to property prices in 2023.

Limassol and Paphos – the most popular regions for holidays and foreign investment – earned the highest rental revenues. Famagusta and Nicosia, both in the north, made the least by way of rent.

Good to know

If you’re thinking about investing in a buy-to-let property abroad, then it’s important to look at the general state of the country’s economy. A quick look at key factors in Cyprus show that buying here could be a solid rental earner:

 

  • The economy is growing and stable – which is great if you’re planning to buy real estate here as your investment will be safe.
  • The tourism market is strong, which is an advantage if you’re looking to rent out your property for short periods and higher rent.
  • Housing prices are slowly increasing, which shows there is demand for property. This is from both non-residents and residents.[5] It also suggests that you could benefit from an increase in value over time.

Who is buying property in Cyprus?

Cyprus has long been a favourite destination for people looking to relocate or invest. In 2022, Cyprus had the second highest percentage of foreign citizens in the EU. British expats make up the largest community of foreigners living on the island but there are also lots of Americans. Russians and Eastern Europeans who have bought property on the island.[12]

 

In December 2023, more non-EU buyers purchased property than EU buyers. The total number of foreign buyers increased by 9.6% compared to November 2023.[5] In fact, more and more non-EU citizens are purchasing property in Cyprus with Israelis, Brits and Russians leading the way.

 

The increase in foreign buyers may be down to the permanent residency-by-investment scheme (which is currently possible through a €300,000 purchase of real estate).

 

There are also large groups of retiree expats throughout Cyprus due to the lower cost of living (when compared to most other Western European countries), the climate, good healthcare, and a more relaxed pace of life.[14]

 

Northern Cyprus has also seen an increased level of foreign property investment with towns such as Iskele growing in popularity with Russian and Iranian buyers.[15]

How iad Overseas can help you

Our iad Overseas property consultants can help you in your search for the perfect property.

 

You might be thinking about relocating, retiring, or simply buying a holiday rental on the island. Whatever your reason, our team can assist. Get in touch with us today so we can show you what Cyprus has to offer.

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