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Cyprus House Prices Rise 8.5% As Foreign Demand And Construction Costs Sustain Market Momentum

Cyprus’s residential property market continued to strengthen in the second quarter of 2026, with house prices rising 8.5% year on year, according to the Central Bank of Cyprus (CBC). The latest figures point to a market still being supported by robust demand from both foreign and domestic buyers, alongside higher construction costs.

Prices Advance Across Most Segments

The CBC’s general residential property price index reached 109.7, marking a 2.4% increase from the previous quarter. House prices rose 5.8% annually, while apartment prices posted a sharper 8.9% increase, underscoring continued appetite for urban housing stock.

Price growth accelerated in all districts except Limassol. Famagusta recorded the strongest annual increase at 10%, followed closely by Larnaca at 9.8% and Paphos at 9.6%. Limassol saw prices rise 7.8%, while Nicosia registered a 5.7% increase.

Foreign Buyers Remain A Key Driver

The central bank said the market’s momentum was driven primarily by strong demand for residential property, especially from overseas buyers. Domestic demand also remained supportive, though the pace of growth was more measured.

That trend was reflected in transaction activity. A total of 5,298 sale contracts were deposited with the Department of Lands and Surveys in the quarter, up 15.4% from 4,592 in the second quarter of 2025. The CBC said foreign demand was the main contributor to the increase, with local buyers also continuing to participate in the market.

Supply Is Beginning To Respond

On the supply side, building activity also picked up. Approved residential units covered by building permits reached 8,978 in the first five months of 2026, compared with 5,484 in the same period a year earlier — an increase of 63.7%.

The CBC also pointed to the European Commission’s June economic sentiment survey, which showed construction activity remaining in positive territory. That suggests housing supply may continue to rise gradually, although likely not fast enough to offset demand in the near term.

A Market Still Tilted Toward Sellers

For now, Cyprus remains a market where demand is outrunning supply in several areas. With foreign capital still active, domestic buyers resilient, and construction costs elevated, price pressure is likely to persist unless new supply accelerates meaningfully.

EU Agrees On Major Overhaul Of Financial Market Supervision

European Union finance ministers have reached agreement on a sweeping package designed to strengthen oversight of the bloc’s financial markets, in a move aimed at reducing fragmentation and improving the flow of capital across borders.

A Push To Deepen Capital Markets

The Market Integration and Supervision Package, or MISP, would grant the European Securities and Markets Authority direct supervision over major market operators that are currently regulated by national authorities. The reforms are intended to make Europe’s capital markets more integrated, more efficient and better able to channel savings into productive investment.

According to the Irish presidency, the package is meant to help savings and investments move more freely across the European Union, improving access to finance for companies while giving households broader opportunities to earn returns on their savings.

What The Reform Would Change

Under the new framework, ESMA would take direct oversight of key trading venues, clearing houses, securities settlement bodies and crypto-asset service providers. The package would also establish a permanent, independent executive board within the regulator, strengthening its institutional capacity.

Market operators would be able to opt into a new EU-wide operating framework. In parallel, the reforms would seek to make national supervision more consistent and update rules governing trading, transaction completion, investment management and the use of blockchain technology.

Why The Agreement Matters

Supporters of deeper capital markets argue that Europe has long paid a price for regulatory inconsistency. While many rules are harmonised across the bloc, differences in enforcement and supervision have contributed to a patchwork system that can make cross-border investment slower and more costly.

A more integrated framework, proponents say, could lower costs for companies seeking funding and broaden the menu of investment options available to savers and institutional investors alike.

Outstanding Questions Remain

Despite the broad agreement, some important details remain unresolved. Trading venues operated by Deutsche Börse, the company behind the Frankfurt stock exchange, may remain outside ESMA’s direct supervision.

Euronews previously reported that Germany had secured an exemption for Deutsche Börse’s domestically focused trading venues, leaving part of the system under regional supervision. The latest announcement did not clarify whether that arrangement will stand.

A Step Forward For The Savings And Investments Union

Dutch Finance Minister Eelco Heinen welcomed the deal, calling it a major advance for the Capital Markets Union and saying Europe had made more progress in 10 months than in the previous 10 years.

The agreement is an important milestone in the Savings and Investments Union, the EU’s broader effort to channel more of Europeans’ savings into investments that can support growth, innovation and competitiveness across the bloc.

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