Blog · 2025-06-11

Cyprus real estate in 2025: trends, investment and outlook

This research report from Murblz sets out the latest data and outlook for the Cyprus property market in 2025. Despite external headwinds, the market continues to grow steadily and remains one of the most attractive destinations for foreign investment in the European Union.

1. Current statistics (2024 to early 2025)

2024 was a record year for Cypriot real estate in terms of capital invested, with the total value of transactions reaching €5.71 billion, up 1% on 2023. At the same time, the number of transactions fell by roughly 3% to 23,900, pointing to a rise in average property values. Limassol retained its lead by value, accounting for about 44% of total sales. Prices kept climbing, with coastal areas rising most sharply: in Paphos and Larnaca prices jumped 18-21% over the year, against around +16% in Limassol and about +5% in the capital, Nicosia.

Across 2024, transaction trends varied markedly by region:

• Nicosia: up 14% (3,527 deals in 2024 versus 3,105 in 2023), driven by stronger local demand.
• Larnaca: up 5% (3,356 versus 3,185), steady growth on the back of new projects and affordable pricing.
• Limassol: down 1% (5,032 versus 5,092), a marginal dip while remaining the largest market at about 30% of all sales.
• Paphos: down 8% (3,107 versus 3,375), a moderate cooling after the boom of previous years.
• Famagusta: down 5% (775 versus 812), a slight decline in the smallest market by volume.

Early 2025 shows a positive trend. In the first quarter, 4,137 sale-and-purchase contracts were signed, 15% more than a year earlier. Despite a slight fall in registered title transfers (-2.9%), the total value of these deals rose 15%, exceeding €1.1 billion. Limassol reinforced its role as the market's engine, with about 1,295 transactions worth €429 million registered over the quarter. Nicosia recorded the largest number of title transfers over the same period (1,304 properties worth €283.5 million), reflecting resilient domestic demand. Paphos and Larnaca were also highly active, with roughly 800-910 deals each over the quarter. Analysts note that 2025 "started on the right note," and the outlook remains positive amid still-strong demand and rising new construction.

2. Demand: local versus foreign

Domestic demand

Local buyer activity picked up noticeably in 2024. Sales to Cypriots rose by around 10% year on year, with gains across all the major districts except a small dip in Famagusta. Deals involving local residents made up some 60-65% of all transactions (for reference, Cypriots accounted for about 63% of sales in December 2024). This growth reflects steady economic recovery, improved lending conditions and a preference among local families for affordable apartments over houses: apartments accounted for about 68% of all residential deals in 2024.

Foreign buyers

Demand from overseas investors cooled somewhat in 2024, with the number of deals involving foreigners falling by 10%. Purchases by non-EU nationals dropped most sharply, down 12% on 2023. This is linked to the end of the "golden passport" scheme and high price thresholds in traditionally popular locations. Non-resident purchases fell 26% in Limassol and 16% in Paphos, for example. Even so, these two resort regions still accounted for more than 60% of all sales to foreigners. At the same time, interest is growing in more affordable destinations: Nicosia (up 19% in deals with foreign nationals in 2024), Famagusta (up 13%) and Larnaca (up 4%) all drew more foreign buyers.

Analysts point to a clear shift in foreign investors' focus: high prices in Limassol have pushed many of them toward the more affordable markets of Larnaca and Paphos.

EU versus non-EU nationals

Property purchases by nationals of other EU countries fell only 3% in 2024, while deals involving non-EU nationals declined more steeply, by 12%. Among Europeans, resort areas remain the most popular: despite a slight cooling of interest in Paphos (-8%), the number of deals rose in Famagusta (+22%), Nicosia (+10%) and Larnaca (+6%). Among third-country investors there was a reshuffle: demand from traditional CIS buyers fell, but interest grew among new investor groups from the Middle East and Asia. Nicosia proved something of a discovery, with non-EU investor deals there rising 28%, attributed to the capital's appeal for companies and students. Overall, despite a temporary dip in the foreign share, Cyprus retains its status as a sought-after destination for overseas buyers thanks to its climate, quality of life and EU membership.

3. Investment returns on Cypriot property

Long-term rentals

Residential property in Cyprus delivers steady income for investors, with gross yields on long-term lets averaging 4-6% a year of the property's value. That is several times higher than bank deposit returns (term deposits paid about 1.98% a year in 2024). Apartments and seafront properties offer the best returns. In Limassol, the most expensive city, rental yields range from about 4% to 6% a year, with premium coastal apartments commanding especially high rates. In Larnaca average yields reach 5-6%, thanks to relatively low purchase prices and steady rental demand near the beaches and the airport. The capital, Nicosia, delivers a slightly more conservative 4-5% a year, reflecting sustained demand for housing near business districts and universities. Paphos and the Famagusta resorts (Protaras, Ayia Napa) show around 4-5%, though these regions realise their full potential through short-term holiday lets. Notably, apartment yields are typically higher than those of villas: according to RICS, average apartment yields at the end of 2024 were about 5.4%, versus around 3.0% for detached houses. This helps explain why investment purchases are shifting toward condominiums and apart-hotels. With the rental market expanding (the share of tenants has risen to about 30% of households), real estate remains an attractive long-term investment.

Short-term rentals (holiday lets, Airbnb)

The short-term rental sector in Cyprus is booming, fuelled by record tourist arrivals. According to AirDNA, a typical Airbnb property is occupied about 63% of the year (roughly 230 nights) at an average daily rate of about $91, generating around $20,000 in annual income for the owner. In 2024 the number of active Airbnb listings topped 15,400 (up more than 10% over the year), with supply growing fastest in Nicosia (+25%) and Limassol (+17%). Short-let income often exceeds that of a conventional lease: owners can flex prices upward in high season and earn 1.5 to 2 times more per month than under a long-term contract. The key resort zones are the most profitable: AirDNA estimates average annual income per property at about €61,300 in Ayia Napa, around €46,200 in Protaras and about €55,800 in the Peyia area (a resort near Paphos). By comparison, short-let income is lower even in the major cities (about €13,500 in Nicosia and €18,300 in Larnaca a year). A villa or apartment in a top tourist destination can therefore return 8-10% a year or more on the sum invested, well above the market average. Short-term letting does require active management, of course (guest check-ins, cleaning, marketing), so many investors bring in professional property-management firms to boost ratings and returns.

The trend is clear: as a popular holiday destination, Cyprus gives investors the chance to earn strong returns on property through platforms such as Airbnb and Booking.com. Regulation of the sector remains fairly liberal, which makes running this kind of business easier.

4. Legal aspects for foreign investors

Cyprus has a transparent and reliable property legal system inherited from British law. Options for foreign investors are broad: EU nationals enjoy the same rights as Cypriots and can freely buy an unlimited number of properties of any value. Non-EU nationals can also buy property (residential or commercial), though some restrictions apply: as a rule, a single third-country national may register no more than one villa or apartment, or one plot of land of up to 4,013 m². In addition, after signing the sale contract a non-EU buyer must obtain a one-off Council of Ministers permit to acquire the property (a formality that is usually granted automatically). In practice these limits do not prevent investors from acquiring several properties by setting up local companies or registering assets in family members' names where they need to go beyond the cap.

Deal structure and security

The property-purchase process in Cyprus is carefully regulated and designed to protect the investor. It is advisable to hire an independent lawyer who acts solely for the buyer. The standard procedure involves reserving the property with a small deposit and full legal due diligence, in which the lawyer verifies the seller's clean title, the absence of encumbrances and the presence of all building permits. A sale-and-purchase contract is then drawn up and signed, after which it is registered with the district Land Registry (within six months of signing). Registering the contract in the state registry protects the buyer: the property cannot be resold, even if title has not yet passed. Once all conditions are met (payment, and the permit for non-EU nationals), title is transferred to the buyer's name at the Land Registry and the applicable fees are paid. The new owner then receives the Title Deed, a state certificate of ownership. This system ensures a high degree of security and transparency, which appeals to foreign investors.

Purchase taxes and fees

The tax burden on property in the Republic of Cyprus is moderate by European standards. The main costs of acquisition are:

• Stamp Duty: a one-off charge on signing the contract, about 0.15-0.20% of the value (a progressive rate). The contract will not be accepted for registration without it.
• VAT: new-build property bought from a developer carries VAT of 19%. For a first home, however, a reduced rate of 5% applies to the first €200,000 of value (with 19% on the remainder). Many investors do not qualify (as they will not be residents) and therefore usually budget for the full 19%.
• Transfer Fee: levied by the Land Registry when title is registered to the new owner, on a progressive scale of 3-8% of the property's market value. If VAT was paid on the property (new-build), no transfer fee is charged, a welcome bonus for buyers purchasing from developers.
• Legal fees: a lawyer's services typically cost around 1-2% of the property price (plus VAT), depending on the complexity of the deal.
• Other costs: a small fee applies for filing the application with the Council of Ministers (for non-EU buyers) and, where needed, for document translation. Property insurance is not compulsory but is recommended. Annual municipal charges cover only refuse collection, amenities and the like (typically €100-200 a year, usually paid by the seller on a pro-rata basis at the time of sale).

It is worth stressing that Cyprus has no annual property tax (Immovable Property Tax was abolished in 2017).

There is also no inheritance tax: passing a villa or apartment to heirs is not subject to any charge, which sets the jurisdiction favourably apart from many EU countries. Capital Gains Tax is 20% on the difference between purchase and sale price (after indexation for inflation); it is payable only where value has appreciated and is not levied, for example, where an owner holds a property without selling. Rental income tax for Cypriot tax residents is progressive (up to 35%) but is effectively reduced by allowances and deductions, so in practice many private landlords pay around 0-5% on their rental receipts. Foreign investors who do not become residents are usually exempt from special rental levies. The tax regime is therefore highly favourable to owners: there are no annual property taxes and income is taxed lightly, which raises the net return on real estate investment.

Legal options and corporate structures

Investors can buy property either as individuals or through a Cypriot company. Setting up a local company (Ltd) makes it possible to sidestep certain restrictions (for instance, owning several properties even where the beneficial owner is not an EU national) and can be advantageous for VAT and rental-tax planning. Cypriot companies are taxed at one of the lowest corporate rates in the EU (12.5%), and dividends can be paid to foreign shareholders without withholding tax at source. Many overseas investors use this route to optimise the way they hold property.

Overall, the Cypriot legal system is open to foreign real estate investment and offers clear mechanisms to protect property rights. Murblz recommends obtaining tailored legal advice before any major transaction, so the purchase can be structured in the best possible way given all the legal and tax considerations.

5. External factors and the investor environment

External factors inevitably shape the market, but Cyprus shows considerable resilience to global shocks. The island's geopolitical position is unique: sitting at the crossroads of Europe, Asia and Africa, Cyprus remains an oasis of stability and security, attracting capital from less settled regions. In 2022-2023 the country took in thousands of highly skilled arrivals from Eastern Europe (IT businesses relocating amid the conflict), which fuelled demand for housing and offices. In 2024 there was a correction as the market absorbed this influx, but many of the newcomers have settled in Cyprus for the long term and are integrating into the economy. External conditions are expected to be relatively stable in 2025: EU monetary policy is gradually easing (the ECB began cutting interest rates in early 2025), which will improve mortgage affordability and may draw more local buyers into the market.

EU policy on "golden passports" has tightened, but Cyprus swiftly pivoted to a residency-by-investment model that will remain in place. The island's potential accession to the Schengen area in the coming years (an application is under review) would add to property's appeal for global investors by raising the value of Cypriot residency. Internationally, Cyprus is strengthening ties with the Middle East and Asia, and greater interest from investors in these regions is expected given the favourable tax regime and the ease of doing business on the island (an English-speaking EU jurisdiction). Improved relations with the United States (the lifting of visa requirements for Cypriots in 2023) and possible progress in resolving the Cyprus question could also benefit the investment climate.

Overall, provided the political situation remains stable, 2025 promises to be a strong year for the Cyprus property market. Robust demand, underpinned by tourism and an influx of expatriates, together with large-scale infrastructure projects, sets the stage for further growth in prices and transaction volumes. At the same time, rising supply of new housing (building permits issued in the first half of 2024 were up 32.5%) will help avoid shortages and keep the market in healthy balance.

Investors are advised to watch promising locations: Larnaca, with its regenerated seafront and port; Paphos, with the development of its western coast (a new highway); Nicosia, with its technology cluster; and selected projects in Limassol and the Famagusta resorts, where a shift toward higher-quality tourism is under way.

In conclusion, the Cypriot property market enters 2025 on a wave of positive expectations. It remains one of the few European markets where it is possible to combine high returns with immigration advantages. Murblz closely tracks current trends and opportunities on behalf of its clients, from investments aimed at securing residency to projects with high rental yields.

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