Real Estate in Cyprus: An Introduction

The real estate sector was worth EUR3.1 billion in construction contracts in late 2024. In a speech at the Annual General Assembly of the Cyprus Property Developers Association on 12 December 2024, the President of the Republic called construction the “engine” of the Cyprus economy, confirming its contribution to business growth. The University of Cyprus Economic Research Centre reported in January 2025 that “[r]eal GDP growth in Cyprus is estimated to have accelerated from 2.6% in 2023 to 3.7% in 2025 and 3.0% in 2026”. The report notes increased construction investment and stronger business confidence in services and construction. Inflation has shown significant deceleration, with a downward trend in interest rates.

Nevertheless, the Royal Institute for Chartered Surveyors (RICS) indicates that most asset categories changed little during the third quarter of 2024 compared with the previous quarter. The notable exception was apartments, which showed a substantial increase year over year. Therefore, only a “cautiously optimistic mood” is recommended. This guide outlines the trends and developments in Cyprus real estate for 2025, relating them to current comprehensive reforms and the legal, financial and sociopolitical contexts that have defined the year.

Current issues

Trends

Currently, the market is investing in short-term rentals (short-term holiday accommodation and homestays): hotels or self-service apartments, the so-called “Airbnbs”.

Self-service apartment rentals happen mainly through Airbnb, Booking.com and private companies that own self-service apartments. In earlier years, private individuals rented property for such purposes. This does not happen so much now because of legislation interference. The Regulation of Establishment and Operation of Hotels and Tourist Accommodation Law 34(I)/2019 covers self-service apartments and requires licensing, registration for tax and monitoring purposes and compliance with minimum quality standards. An Airbnb should have at least a living room and a bedroom (these can be joined, studio-like), a ventilated kitchen area and a bathroom. For three bedrooms and above, the unit must have two bathrooms.

Moreover, foreign companies arrange their employees’ accommodation by renting flats exclusively. The construction sector has attracted foreign investment, with foreign developers and construction companies coming to Cyprus to build and sell. Their clientele mainly comprises non-Cypriot buyers.

Indeed, a present concern is the inability of Cypriots/locals to buy real estate due to rising prices; they cannot afford their own homes, whether houses or apartments. Some have dealt with this problem by remaining in rented property or moving to the countryside, even in remote areas.

Limassol shows a downward trend in real estate investments, and the real estate market in Famagusta is also weakening. Large companies have turned towards Larnaca for real estate, especially those in the services sector, because of Larnaca’s location and qualities and the relatively low real property prices. Larnaca contains the Republic’s largest airport, is the second major port after Limassol, and is just a 25-minute drive from the capital, Nicosia. However, real estate prices are below those of Limassol and Nicosia, making Larnaca an excellent alternative choice for investors.

Complications

Cyprus's real estate sector is mainly characterised by complications. In a speech in Athens on 31 January 2025, the current Minister of the Interior said that such complications are caused by the rise of foreign investment in real property and the use of Airbnb. He underlined that Cyprus is trying to promote a housing policy and increase the number of available housing units through building incentives. The Ministry is even considering requesting the EU Commission to create a special housing unit at the EU level.

Foreign buyers trust the Cyprus real estate market

Meanwhile, foreign buyers show unremitting interest in the Cyprus real estate market, with nearly 50% of real estate purchases being made by foreigners in 2023 and 2024. The press takes this as evidence of the trustworthiness of the Cyprus real estate market.

Reports from press, regulatory bodies and entrepreneurs

Reports in the press suggest that demand is stable for apartments, which show an annual increase of 1.5% for both sales and rental prices. House prices show a slight increase while house rentals are decreasing. Similar falls are reported concerning warehouses and commercial properties. Construction costs remain high.

The Cyprus Scientific and Technical Chamber (ETEK) is responsible for the licensing and monitoring of architect, civil engineers, evaluators and others in the construction and real estate fields, and summarised the current concerns in the January 2025 issue of its official periodical. The main problem is affordable housing. Others are the untested efficiency of the newly formed District Local Government Organisations (see below), the need to increase inventory, building misregulation, buildings in environmentally sensitive areas, dangerous buildings, cultural heritage and complex bureaucracy.

Real estate entrepreneurs argue that a feasible plan to reform the real estate market must include an estimate of the amount of land needed to meet needs, but such an estimate is not currently available. They also mention two factors that upset the market: banks confiscate real estate and later sell it at low prices, while construction costs remain high.

Legislation and government policies

Reform, policy formation and the aim for transparency in and simplification of procedures are the primary elements of the government approach to real estate in 2025. Moreover, relief of the housing problem (creation of affordable housing), countryside revival and sustainability are among the challenges and needs identified in the Ministry of the Interior Action Plan 2025.

Legislation proposals for foreign buyers

Third-country nationals need permission from the Council of Ministers to buy land in Cyprus. The procedure, though uncomplicated, takes two to four weeks and needs reform. The Ministry of the Interior has submitted a bill to set a two-week limit for the process and introduce changes to guarantee transparency and orderly regulation. Under the new bill, applications should be accompanied, inter alia, by:

• a copy of a clear criminal record from the buyer's country of origin and/or residence; and
• documents certifying the completion of due diligence and “know your client” procedures.

The new bill generally overhauls documentation and processes. Permissions will be registered electronically in a record curated by the Ministry Secretary when granted.

Government policies

The government has acknowledged that affordable housing is a central issue in real estate. In a press release dated 29 January 2025, the Presidency of the Republic summarised government policies and schemes regarding housing.

The government will allocate funding with a budget of EUR75 million to address citizens’ housing needs. In 2025, the major policies to be implemented are:

• the new Plot Allocation Scheme in communities, offering plots at 25% of their market value;
• the revised Housing Subsidy Scheme for individuals over 41 years old, with financial assistance of up to EUR50,000;
• the revised refugee housing schemes of the Service for Care and Rehabilitation of Displaced Persons, under which several young displaced persons will benefit;
• an increased subsidy of 20% for all housing schemes for countryside home acquisition in rural and disadvantaged areas (with a focus on young, displaced persons); and
• a further EUR70 million budget to revitalise the countryside.

Meanwhile, land developers will be allowed a higher building density factor if they sell part of their new development at affordable prices or make a financial contribution to the Cyprus Land Development Association (a government organisation set up in 1980 to help with housing issues).

Establishment of the District Local Government Organisations

Establishing District Local Government Organisations is expected to introduce flexibility in land registration and building/construction permissions. These Organisations are public law bodies with comprehensive powers over water supply, sewage, refuse, finances and land registration.

New building permission timelines

On 3 February 2025, the Ministry of the Interior announced the start of a new, flexible system of building permissions. Some procedures will be automated. In sum, the scheme provides for the following.

• Building permissions for houses (double or single) are issued within 20 working days. This covers about 30% of applications.
• Building permissions for low and medium-risk developments of up to two housing units are issued within 40 working days. The low-risk developments comprise up to two housing units, while medium-risk developments comprise (with exceptions) three to four housing units or up to 12 residences in a straight line, building blocks with 20 apartments and up to four floors, not including a ground floor parking area.
• If permission is not issued within the time limit but there is no rejection, it is considered to have been issued. However, there are safeguards: town planning will conduct random inspections every six months.

Building inspectors

The Ministry of the Interior also announced that a building inspector scheme will be established through Ministry regulations. Inspectors will be responsible for visiting and monitoring building sites. The Ministry worked with ETEK to produce the regulatory framework and create a list of building inspectors. ETEK recommends that the scheme, once put into effect, should contain strict deadlines and be carried out electronically to avoid delays.

The scheme has been announced for medium-risk developments. Building inspectors must be ETEK members, and legislation ensures they perform their duties objectively, independently and without bias. This legislation was passed in the form of administrative regulations on 25 April 2025.

Case law

A recent constitutional law decision has raised concerns about real estate, particularly about the so-called “trapped” or “enclaved” buyers (hereafter called “trapped buyers”). These buyers do not have title deeds to their property even though they may have paid the full price or are regularly paying their mortgage. This happens when the seller cannot transfer the title to the property, usually because they have already mortgaged the property without using the sale proceeds to repay the mortgage.

To deal with the issue, the government passed legislation (in 2011, 2015 and 2024) under which the Director of the Department of Lands and Surveys (DLS) could, on application by the trapped buyer, lift the original mortgage and transfer the property to the trapped buyer. This could, of course, only be done if the trapped buyer had repaid the mortgage themselves.       

Nevertheless, the power granted to the Director of the DLS has since been held to be unconstitutional, in Civil Appeal 285/ 2018 at the Cyprus Court of Appeal. The Cyprus Constitution, being in full accord with the European Convention on Human Rights, grants the right to property and freedom of contract. Although lawful restrictions to some rights are allowed, cancellations are not. The power of the Director was held to be a cancellation of both the bank’s right to property (mortgage is a type of property) and its freedom of contract. Certain safeguards in the legislation were considered ineffective and unable to bring the present law within constitutional demands.

Moreover, in a July 2024 judgment, the Cyprus Court of Appeal pointed out that previous case law has established that the Director of the DLS has no authority to adjudicate on property rights, let alone cancel them.

Since the decision, the DLS has stopped hearing applications from trapped buyers.

Looking for a solution to the title deeds matter

Nevertheless, the Ministry of the Interior has held meetings with the banking sector, members of the working committee for trapped buyers, and other stakeholders. The matter is given priority, and hopes have been expressed that a solution will be found soon.

Upcoming and new projects

Long-awaited public projects – ie, landmark developments that will enhance lifestyles in their respective areas – are approaching completion in 2025. One such example is the regeneration of Nicosia’s commercial centre, especially the central Archbishop Makarios Avenue.

The Holy Metropolis of Limassol announced its willingness to make 448,033 square metres of land in Amathous municipality available for development. Such development must involve beneficial projects related to health, education and the environment.

The Minister of the Interior noted in a speech on 11 April 2025 that the government is preparing a new scheme for mixed developments in commercial areas.

Meanwhile, reports in the press talk of further new project competitions in 2025.

Other developments

Housing plans and business premises loans

Various mortgage schemes are maintaining mobility in the real estate market. For example, one major bank has announced a new housing plan, which provides for a stable interest rate for the first three years while giving home buyers a five-year option. The scheme is expected to start at the end of March 2025.

At the same time, all banks offer commercial mortgages, business loans or business premises loans. These are lending schemes designed especially for starting or expanding a business, purchasing goods and equipment, renovating premises or buying commercial property or property for professional purposes. Repayment can be arranged over 20 years, while the maximum amount lent can be over EUR1 million.

Forecast

Forecasts for 2025 are antithetical. Some estimates predict that growth will slow down, making 2025 a turning point for the real estate market, but other reports are positive. In late 2024, the Real Estate Agents Registration Council expressed optimism, saying that the real estate sector is retaining resilience. At the same time, the Council admitted that 2024 was a “difficult” year, with only a marginal rise in transactions and sales. Challenges include high interest rates, weakening buying power on the part of Cyprus citizens and increased construction costs. Still, some market analysts reportedly do not expect any significant problems in 2025; the year is expected to be similar to 2024 concerning real estate.

Conclusion

The real estate sector in Cyprus retains its vibrancy despite challenges and continues to evolve. Trends and developments relate to social conditions, geopolitics and how Cyprus interacts with the rest of Europe and the world. Importantly, they also relate to legislation, judicial developments and ongoing government policies, initiatives and schemes.