Based on data originally reported by Cyprus Mail (October 17 2025) and the Central Bank of Cyprus, with our independent RealtyHub analysis and commentary.

According to a recent article by the Cyprus Mail, the residential property market in Cyprus continued to display healthy momentum in the second quarter of 2025, with the Central Bank of Cyprus (CBC)’s House Price Index (HPI) showing upward movement across the island. 

We believe this signals both opportunities and caution for participants in the market — especially given the interplay between domestic demand, foreign investment and shifting regional patterns.

Key figures at a glance

• The overall HPI rose by 4.7% year-on-year in Q2 2025.
• Quarter-on-quarter, prices increased by 1.5%, slightly down from 1.9% in Q1.
• A deeper dive by property type shows a divergence:
• Apartments: 3.1% quarterly growth; 5.3% annual gain.
• Houses: A 0.1% quarterly drop, pushing annual growth down to 3.4%.

Geographically:

• Only Limassol saw acceleration of annual increase (6.8%).
• In Nicosia, house prices actually declined by 1.6% year-on-year.

On the transaction side:

• Total sales documents rose 16.1% year-on-year in Q2 (4,592 vs 3,956) across all property types.
• Of these, 1,717 were to foreign buyers (up 17.8% from a year earlier) and 2,875 to domestic buyers (up 15.1%).
• Paphos stood out: foreign buyers accounted for 60% of transactions in the district.

Supply side signals:

• Building permit approvals for residential units (Jan-Apr 2025) were 4,321, up 12.1% from the same period in 2024.
• Construction material price inflation was modest at 1.4% annual in Q2 2025.
• New mortgage lending volume increased by 22.2% year-on-year (to €353.5 m) and the average floating-rate mortgage interest fell to 3.85% (from 4.58%) in Q2.
• Sentiment: An index of property-price expectations fell sharply to 22.2 in Q2 2025 from 62.8 the year before — hinting at more cautious future price outlooks.

What’s behind the numbers — and what to watch

1. Why apartments are leading & houses dragging.

We think the stronger growth in apartments (5.3% annual) vs houses (3.4%) reflects a combination of factors: foreign/investor demand often targets apartments (especially in coastal/seaside locations), and perhaps tighter budgets for domestic buyers limiting large-house purchases. The drop in houses quarterly suggests that for “stand-alone” properties the market may be nearing a saturation point or facing headwinds (costs, mortgage rates, peripheral locations).

2. Foreign buyers remain a key driver.

The 17.8% jump in foreign property purchases in Q2 underlines how much of the Cyprus market is still influenced by non-resident/international capital flows. We believe that for many overseas buyers the Cyprus proposition (sea, climate, EU membership, tax rules, immigration policies, etc) remains strong — and this propels demand (especially in districts like Paphos). However, heavy reliance on foreign purchases may also introduce volatility, especially if global conditions shift or regulation tightens.

3. Supply is rising, but not explosively.

While building permits are up 12.1% and mortgage lending is strong, the construction cost inflation is low (1.4% year-on-year) and the sentiment indicator for price rises is weak. We interpret this as a sign that the market is gradually balancing: supply is improving, but expectations for rapid price growth are cooling.

4. Regional divergence matters.

Limassol still sees accelerating annual price growth (6.8%), while Nicosia has an annual decline in house prices. This means investors and agents must tailor strategies by district — “Cyprus property market” is not a one-size-fits-all story. For example, buyers seeking capital appreciation may still prefer Limassol or Paphos (where foreign demand is strong), whereas domestic buyers in Nicosia may find more value (or competition) for houses.

5. Financing and mortgage climate remain favourable (for now).

With mortgage interest down to 3.85% and strong growth in lending volumes, we believe that buyers with access to funds are still well-positioned. But one caveat: if global rates rise or banks tighten criteria, this could affect domestic demand more than cash-buyers (often foreign).

Implications for our MLS platform — RealtyHub

For the RealtyHub community of agents, buyers, sellers and investors, this evolving picture suggests several action points:

• For sellers/agents: Emphasise apartment listings in hot districts (Limassol, Paphos) — these are seeing momentum. House sellers should be realistic about growth expectations and prepare to market more aggressively (e.g., emphasise energy-efficiency, renovation potential, unique value).
• For buyers/investors: If your strategy is capital appreciation, target areas with foreign-buyer strength & good fundamentals (supply constraints, infrastructure improvements). We think that timing is more important now: the days of double-digit annual growth are behind us.
• For domestic buyers: Lower house price growth means perhaps better opportunities to negotiate — especially if relying on mortgage finance. Monitor financing conditions carefully.

The information provided in this material is intended for general informational and educational purposes only and does not constitute legal, financial, or investment advice.

In sum, the Cyprus residential market remains on an upward trajectory — but it is more moderate, more nuanced and increasingly shaped by foreign demand and regional variation. The data from the CBC and other official sources (as reported by Cyprus Mail) provide a robust base. We believe that the key for stakeholders is to adjust proactively: recognise that growth is still there, but it’s no longer open-ended, and that location, property type and buyer profile matter more than ever.