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Cyprus Real Estate Market Monitors Impact Of Middle East Tension

by THEFUTURE.TEAM

Real estate professionals in Cyprus are assessing the potential impact of Middle East tensions on property demand and prices. Recent developments involving the United States, Israel and Iran have raised questions about how geopolitical risks may influence investment activity on the island. Market participants said Cyprus has previously attracted buyers during periods of regional instability, although current conditions remain uncertain.

Steady Performance In Uncertain Times

Andreas Christoforidis said the market continues to operate with relative stability despite recent developments. According to him, current fluctuations reflect typical changes in investor sentiment rather than structural disruption. He noted that short-term slowdowns have occurred before, including during the 2022 war in Ukraine and earlier tensions in Lebanon.

Historical Resilience And Shifting International Demand

Past geopolitical events have influenced demand in Cyprus, particularly among investors from neighbouring regions. Buyers from Lebanon and Israel have previously turned to Cyprus during periods of instability, supporting market activity. Christoforidis said this pattern continues, with both local and foreign buyers remaining active despite uncertainty.

Market Memory And Tactical Movements

Loizou added that similar patterns were observed after the Beirut port explosion in 2020 and during the escalation of the Ukraine war in 2022. Increased demand was also recorded following the 2023 attacks in Israel, reflecting how investors respond to regional instability.

According to Leondidas Hatzinikolaou, around 40% of real estate transactions in Cyprus involve foreign buyers. This share exceeds 50% in regions such as Paphos and Larnaca. He noted that geopolitical developments have reinforced Cyprus’s position as a destination for international property buyers.

Tourism, Construction Costs, And Future Prospects

Hatzinikolaou also highlighted the link between tourism and investment properties, particularly in the short-term rental market. Around 16,000 properties are currently listed in this segment, meaning changes in visitor flows or occupancy rates may affect investor returns. At the same time, rising construction material costs suggest continued pressure on property prices in the medium term.

A Safe Haven Amid Geopolitical Strife

Market participants said geopolitical tensions may lead to temporary pauses in activity rather than long-term disruption. As conditions stabilise, Cyprus is expected to continue attracting investors from countries affected by regional instability. Recent patterns involving buyers from Israel and Lebanon, as well as earlier market responses to geopolitical events, indicate continued interest in the Cyprus property market.

Bank of Cyprus Upgrade Signals Fresh Optimism For Greek And Cypriot Banks

by THEFUTURE.TEAM

Regional Banks Enter A More Favorable Cycle

Bank of Cyprus and Eurobank are well positioned to benefit from a renewed re-rating of Greek and Cypriot bank stocks, according to Cyprus-based investment firm Roemer Capital, which upgraded Bank of Cyprus to a buy rating and reaffirmed its positive view on Eurobank.

The firm cited easing geopolitical tensions, resilient economic growth in Greece and Cyprus, lower funding costs and Greece’s expected transition to developed-market status as the main factors supporting the sector.

Roemer Capital also lowered its cost of equity assumptions, updated its forecasts following first-quarter 2026 results and extended its valuation horizon to the end of 2027, raising target prices across its banking coverage.

Bank Of Cyprus Gets The Largest Upgrade

Bank of Cyprus received the biggest revision, with Roemer Capital upgrading the stock from hold to buy and setting a target price of €11.10, implying potential total upside of 27%.

The firm highlighted the bank’s strong capital generation, profitability and projected 100% dividend payout, describing it as the strongest capital-return story among the banks under coverage. Roemer Capital maintained its buy rating on Eurobank, assigning a target price of €4.90 and forecasting potential upside of 28%. The report said the bank is well placed to benefit from loan growth, improving operating performance and merger-and-acquisition synergies.

National Bank of Greece and Piraeus Bank also retained buy ratings, with expected returns ranging from 25% to 36%. Optima Bank was upgraded to buy, while Alpha Bank remained at hold on valuation grounds.

Why Growth Still Sets The Region Apart

According to Roemer Capital, Greek and Cypriot banks continue to benefit from stronger economic fundamentals than many western European peers. The report pointed to faster economic growth, healthier balance sheets, low levels of non-performing exposures, capital ratios approaching 20% and strong customer deposit bases.

Analysts expect performing loans across the sector to grow at a compound annual rate of 6% to 8% through 2028, supported by private investment, digitalisation, green manufacturing, supply-chain expansion and a gradual recovery in household lending.

The report also said the conclusion of lending under the EU Recovery and Resilience Facility is unlikely to materially affect credit growth, as banks have already shifted back towards traditional commercial lending. Roemer Capital expects Euribor to remain between 2.2% and 2.5%, a level it believes should support both lending activity and net interest margins.

Geopolitics, Valuation And Market Structure Support The Case

The report said improving geopolitical conditions have strengthened the investment outlook, noting that Brent crude prices have largely returned to pre-war levels while Greek government bond yields have stabilised at around 3.5%. Although geopolitical risks remain, Roemer Capital believes the likelihood of a major inflationary shock or significant pressure on bank profitability has eased.

Another important catalyst identified by the firm is Greece’s expected promotion to developed-market status by FTSE Russell, STOXX and MSCI over the coming months.

According to the report, the reclassification should improve liquidity and attract a broader base of international investors. Roemer Capital also said Euronext’s acquisition of the Athens Exchange is expected to strengthen market infrastructure and increase international visibility, particularly for Bank of Cyprus and Optima Bank.

The firm noted that Bank of Cyprus has already benefited from its Athens listing, with average daily trading value increasing from less than €400,000 before its September 2024 move to nearly €6 million afterwards.

Economic Momentum Remains A Core Tailwind

Roemer Capital said both Greece and Cyprus have moved beyond post-crisis recovery and are now supported by private-sector-led growth. For Cyprus, the report highlighted recent tax reform and efforts to simplify the legal and regulatory framework, while also noting that limited foreign banking competition continues to support domestic lenders.

Overall, Roemer Capital expects Greek and Cypriot banks to remain well-positioned for profitable loan growth over the coming years.

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