Cyprus Property Market Update – Limassol & Paphos (Mid-2025)

Cyprus entered 2025 with healthy momentum in its housing market, but two coastal hotspots are taking very different paths. Limassol remains the island’s powerhouse for luxury buyers, corporate relocations, and rental investors, while Paphos has emerged as this year’s surprise leader – houses are on fire, even as some apartment values soften.

Quick snapshot

• Island-wide: Cyprus residential prices rose by about +4.8% year-on-year in Q1 2025, according to the Central Bank.

• Limassol: still the most expensive city, with average residential prices around €3,200 per m² (up +7.4% YoY). Growth is fuelled by seafront projects and steady international demand.

• Paphos: a split picture – houses jumped +16.9% YoY to ~€693,000, while apartments slipped -10.3%. Premium villas are driving the market.

• Activity: the first half of 2025 has been busy, with more than 8,700 sales contracts filed (Jan–Jun), pointing to strong demand across the island.

Limassol – steady, premium growth

Limassol continues to set the pace for Cyprus. Its mix of international business, marina lifestyle, and luxury new builds has kept prices climbing and rental yields healthy.

• Why it works: a constant flow of high-end waterfront developments keeps ultra-prime demand alive. International investors still see Limassol as a trophy market – whether for corporate relocation or long-term rental returns.

• Rental fundamentals: yields typically range between 5–7%, which looks attractive compared to many other European coastal cities.

What to watch: seafront projects will keep driving headlines, but smart buyers are also exploring suburban areas where entry prices are lower and yields stronger. Mortgage availability and developer pipelines could shape how the mid-market performs later this year.

Takeaway for buyers: focus on well-located new builds or refurbished seafront apartments if you want long-term value. For steady cashflow, 2–3 bed homes in established rental zones still deliver solid performance.

Paphos – villas soar, apartments lag

Paphos has been the story of 2025 so far. Premium houses and villas have surged in demand, while some apartment segments are feeling the pinch.

• What’s driving it: lifestyle buyers and holiday-rental investors are competing for quality detached homes, particularly in coastal and hilltop locations.

• Apartments: older blocks are under pressure, showing that buyer appetite has shifted firmly toward quality houses and bespoke new villa projects.

What to watch: branded villa launches and turnkey projects could keep prices high, while apartments may stabilise only if developers invest in quality refurbishments.

Takeaway for buyers: if you’re chasing capital growth, focus on quality houses in established areas. Be cautious with older apartment blocks unless the price, refurbishment upside, and rental demand all stack up.

Other areas to keep an eye on

• Larnaca: increasingly popular with expats and digital nomads. Infrastructure improvements and good connectivity are boosting demand, with yields in the 4.5–6% range. Seen as strong value compared with Limassol.

• Nicosia: the island’s administrative and education hub. A reliable choice for long-term rental demand from families and professionals tied to business services.

• Ayia Napa & Protaras: seasonal hotspots, excellent for holiday rentals and lifestyle buyers who prioritise beaches. Yields can be strong, but seasonality needs factoring into your numbers.

Key risks to watch

• Location splits: averages don’t tell the full story – Paphos houses are soaring, but some apartments are falling.

• Supply pipelines: if too many new units hit a submarket, pressure could build on prices.

• Macro shifts: eurozone interest rates, visa/residency rules and foreign buyer flows all influence demand.

Practical advice

• Sellers in Limassol: prime properties can be priced ambitiously, but mid-market stock should highlight rental potential and quality finishes to stand out.

• Buyers in Paphos: be selective. Houses look strong, but apartments require a sharper eye for value and refurbishment potential.

• Investors: Limassol offers steady yields on quality new or refurbished stock. Paphos shines for premium villas and re-positioning plays, but plan for a medium to long-term exit (3–7 years).

Our Alexander Carmine Estates team are on hand if you would like to know more.

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Danny

**Sources: Investropa, Cyprus Mail, Phile News, Central Bank of Cyprus, Department of Lands & Surveys, and local market analytics.