Cyprus’s housing market regained clear momentum in the second quarter of 2026, with house prices rising 7.9% year on year, according to Eurostat and the Cyprus Statistical Service (Cystat). The increase was well ahead of the European Union average and points to renewed strength in the island’s residential property market.

Cyprus Extends Its Lead Over The EU

The latest figures show Cyprus outperforming the broader market on both an annual and quarterly basis. House prices in Cyprus rose 2.4% between the first and second quarters of 2026, compared with gains of 1.2% across the EU and 1.1% in the euro area.

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On an annual basis, Cyprus’s 7.9% increase stood above the EU’s 4.7% rise and the euro area’s 4.0% gain. The result places the island among the stronger performers in the bloc, even as price growth moderates in much of Europe.

House Prices Reach A New High

Cystat reported that Cyprus’s House Price Index reached 105.46 points in the second quarter, up from 102.95 in the first quarter and 97.74 a year earlier. The annual pace of growth also marked a sharp acceleration from 3.4% in the first quarter of 2026.

The trajectory has been steadily upward. Annual house price growth in Cyprus was 2.9% in the second quarter of 2025, then rose to 4.2% in the third quarter and 6.0% in the fourth. The second quarter of 2026 therefore represents a further strengthening in the market’s recovery.

New And Existing Homes Both Contribute

Growth was not limited to one segment of the market. Both new and existing dwellings posted gains in the latest quarter.

The sub-index for new dwellings rose to 105.73 points from 103.25 in the first quarter. New-home prices had already climbed from 96.26 in the second quarter of 2025 to 101.71 in the third quarter, 102.06 in the fourth, and 103.25 in the first quarter of 2026 before advancing further in the second quarter.

Existing dwellings also recorded a strong rebound. Their sub-index increased to 105.10 from 102.51 in the first quarter. That followed a more uneven pattern: the index declined from 100.84 in the second quarter of 2025 to 100.59 in the third and 99.82 in the fourth, before recovering to 102.51 in the first quarter of 2026 and then climbing again in the second.

Cystat’s House Price Index measures changes in average residential property prices for both new and existing dwellings, including the land component. The data are based on information from the Department of Lands and Surveys and cover areas under the control of the Republic of Cyprus.

European Growth Slows, But Remains Positive

Across the EU, house prices continued to rise, but the pace of annual growth eased slightly. EU-wide prices increased by 5.5% year on year in the third quarter of 2025, 5.4% in the fourth, 5.1% in the first quarter of 2026 and 4.7% in the second.

The euro area followed a similar pattern, with annual growth slowing from 5.2% in the third quarter of 2025 to 5.1% in the fourth, 4.6% in the first quarter of 2026 and 4.0% in the second.

Quarterly growth also softened before stabilising. In the EU, prices rose 1.6% in the third quarter of 2025, 0.7% in the fourth, 1.1% in the first quarter of 2026 and 1.2% in the second. In the euro area, the equivalent figures were 1.5%, 0.4%, 0.9% and 1.1%.

Among EU countries with available data, Portugal recorded the strongest annual house price growth at 16.5%, followed by Bulgaria at 15.5% and Lithuania at 14.3%. At the other end of the spectrum, prices fell 2.7% in Finland, 2.2% in Luxembourg and 0.8% in France.

Quarterly gains were led by Lithuania at 5.0%, Bulgaria at 4.5% and Romania at 4.4%. House prices fell 1.4% in Hungary and 0.8% in France. Overall, 23 EU countries posted annual price increases, while three reported declines; on a quarterly basis, prices rose in 24 countries and fell in two.

Rents Remain Under Pressure

The broader European housing market is also still seeing upward pressure on rents. Eurostat reported that EU rents increased 3.0% year on year in the second quarter of 2026, with the euro area following a similar path. Compared with the first quarter, rents across the EU were up 0.7%.

Over the longer period from the 2025 annual average to the second quarter of 2026, rents increased in every EU country. Romania recorded the steepest rise at 41.2%, followed by Croatia at 22.1% and Slovenia at 10.2%. The smallest increases were seen in Estonia and Finland, both at 0.1%, and Luxembourg at 1.2%.

Eurostat’s data on actual rental payments also show that rental costs in Cyprus remained elevated in 2026, with the relevant index at 104.30 in both July and August, after reaching 103.37 in March.

The combination of firmer purchase prices and persistent rent inflation suggests that housing affordability remains under pressure across Europe. For Cyprus, however, the second-quarter numbers stand out: home prices are rising at nearly twice the EU average, underscoring the island’s relatively strong housing market momentum.