According to the latest RICS Cyprus Property Price Index in collaboration with KPMG, the second quarter of 2025 shows signs of a stabilising property market. Moderate growth was recorded across most categories, with residential and leisure assets leading the way, while retail properties continue to underperform.
Residential Property as the Main Growth Driver
Apartments and houses remain the most dynamic segments, delivering the strongest gains in Q2:
· Larnaca — highest overall growth, particularly in houses and warehouses.
· Nicosia — consistent upward trend in both houses and apartments.
· Limassol — nearly flat performance, with slight declines in warehouses and shops.
· Paphos — warehouses posted the sharpest drop, while apartments showed modest gains.
· Famagusta — offices recorded the strongest growth among all cities.
Long-Term Trends: Housing Outperforms Retail
Compared with Q2 2024, the index highlights clear sectoral differences:
· Strongest growth — apartments and houses.
· Moderate growth — offices and warehouses.
· Weakest performance — retail, which continues to attract limited investment interest.
The long-term trend confirms that residential and leisure properties remain the most attractive asset classes, while retail continues to lag behind.
Tourism Supports Leisure Property Demand
Leisure properties remain a robust pillar of the Cypriot real estate market:
· Tourist apartments — top-performing category with notable increases.
· Holiday homes — continued upward momentum, particularly in Larnaca.
Sustained tourism demand ensures that these asset classes remain highly attractive to both private buyers and institutional investors.
Rental Market: Steady Growth
Rental values continued their upward trajectory year-on-year:
· Strongest increases — apartments and warehouses.
· Modest growth — most other categories.
· Declines — retail, extending the negative trend of previous quarters.
This pattern further reinforces the sense of stabilisation, with price fluctuations remaining limited.
Property Yields: Minimal Adjustments
Property yields remain stable, showing only marginal changes compared with 2024:
· Apartments — 5.41% (vs 5.43%)
· Houses — 2.97% (vs 3.00%)
· Shops — 5.75% (vs 5.80%)
· Warehouses — 4.24% (vs 4.25%)
· Offices — 5.61% (stable)
· Tourist apartments — 5.75% (vs 5.77%)
· Holiday homes — 2.79% (vs 2.78%)
The only noticeable decline was in the retail sector.
Expert Commentary
Simon Rubinsohn, Chief Economist at RICS, commented:
“Economic conditions remain solid, providing support to the real estate market. This is reflected in the latest results from the RICS Cyprus Property Price Index with KPMG in Cyprus, as well as in the Q2 RICS Commercial Property Monitor, which captures investor sentiment on the island. Notably, investor enquiries continue to trend positively.”
Christophoros Anayiotos, Board Member and Head of the Real Estate Industry Group at KPMG Cyprus, added:
“The second quarter of 2025 shows modest increases across all sectors, most notably in apartments and houses. Larnaca recorded the strongest overall growth, particularly in houses and warehouses, while Limassol remained nearly flat. Retail continues to be the weakest segment, although with some positive movement in Larnaca.
Rental values once again posted modest increases, led by apartments, while retail recorded a minor decline, continuing the trend of recent quarters. Overall, the Index points towards stabilisation, with small gains in both sale and rental values and broadly steady yields.”
Investor Takeaway
The Cypriot real estate market is entering a period of stability:
· Residential and leisure properties remain the most attractive and resilient assets.
· Retail continues to underperform, underscoring the need for selective investment strategies.
· Stable yields, steady demand, and growing tourism reinforce Cyprus’s position as a reliable long-term investment market.