Deceleration In Cyprus Residential Property Price Index

The Central Bank of Cyprus (CBC) recently reported a deceleration in the Residential Property Price Index (RPPI) for Q1 2024. This trend highlights a noteworthy shift in the property market, attributed to a normalisation in demand coupled with increased supply and elevated interest rates. Such factors are pivotal in understanding the dynamics of the current real estate landscape in Cyprus.

Quarterly and Annual Trends

The RPPI, which tracks changes in property prices across flats and houses, increased by 1.6% in Q1 2024, following a 2.3% rise in the previous quarter. Specifically, house prices rose by 0.8%, while flat prices surged by 3.4%. On an annual basis, the RPPI saw a 7.8% increase compared to Q1 2023, with flat prices up by 13.9% and house prices by 4.7%.

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District-Specific Changes

The deceleration was not uniform across Cyprus. Pafos and Famagusta districts experienced accelerated house price increases of 3.1% and 4.4% quarterly, and 11.2% and 11.8% annually, respectively. In contrast, Nicosia, Limassol, and Larnaca saw slower quarterly growth of 0.2%, 1.5%, and 2.2%, respectively, with annual increases of 4%, 9.2%, and 10.7%.

Flat prices exhibited a similar pattern. Quarterly, Nicosia recorded a 0.8% rise, Limassol 3.7%, Larnaca 4.3%, Pafos 3.5%, and Famagusta 10.7%. Annually, Limassol, Larnaca, and Famagusta showed significant increases of 16.5%, 18.1%, and 16.5%, while Nicosia and Pafos noted more moderate rises of 5.1% and 21.4%.

Economic Implications

This deceleration signals a potential shift towards a more balanced market. The combination of stabilised demand, increased supply, and the high cost of borrowing due to rising interest rates are crucial factors. Additionally, the minor reduction in construction material costs, despite remaining high, impacts overall market dynamics.

Looking Ahead

The CBC’s caution about future deceleration reflects broader economic concerns. As interest rates continue to rise, the affordability of mortgages may further influence demand. Additionally, the construction sector’s response to material costs will be critical in shaping future supply levels.

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Cyprus Hits Historic Tourism Peak As Overtourism Risks Mount

by THEFUTURE.TEAM

February 13, 2026

Record-Breaking Performance In Tourism

Cyprus’ tourism sector achieved unprecedented success in 2025 with record-breaking arrivals and revenues. According to Eurobank analyst Konstantinos Vrachimis, the island’s performance was underpinned by solid real income growth and enhanced market diversification.

Robust Growth In Arrivals And Revenues

Total tourist arrivals reached 4.5 million in 2025, rising 12.2% from 4 million in 2024, with momentum sustained through the final quarter. Tourism receipts for the January–November period climbed to €3.6 billion, marking a 15.3% year-on-year increase that exceeded inflation. The improvement was not driven by volume alone. Average expenditure per visitor increased by 4.6%, while daily spending rose by 9.2%, indicating stronger purchasing power and higher-value tourism activity.

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Economic Impact And Diversification Of Source Markets

The stronger performance translated into tangible gains for the broader services economy, lifting real tourism-related income and overall sector turnover. Demand patterns are also shifting. While the United Kingdom remains Cyprus’ largest source market, its relative share has moderated as arrivals from Israel, Germany, Italy, the Czech Republic, the Netherlands, Austria, and Poland have expanded. This gradual diversification reduces dependency on a single market and strengthens resilience against external shocks.

Enhanced Air Connectivity And Seasonal Dynamics

Air connectivity has improved markedly in 2025, with flight volumes expanding substantially compared to 2019. This expansion is driven by increased airline capacity, enhanced route coverage, and more frequent flights, supporting demand during shoulder seasons and reducing overreliance on peak-month flows. Seasonal patterns remain prominent, with arrivals building through the spring and peaking in summer, thereby bolstering employment, fiscal receipts, and corporate earnings across hospitality, transport, and retail sectors.

Structural Risks And Future Considerations

Despite strong headline figures, structural challenges remain. The European Commission’s EU Tourism Dashboard highlights tourism intensity, seasonality, and market concentration as key risk indicators. Cyprus records a high ratio of overnight stays relative to its resident population, signalling potential overtourism pressures. Continued reliance on a limited group of origin markets also exposes the sector to geopolitical uncertainty and sudden demand swings. Seasonal peaks place additional strain on infrastructure, housing availability, labour supply, and natural resources, particularly water.

Strategic Investment And Market Resilience

Vrachimis concludes that sustained growth will depend on targeted investment, product upgrading, and continued market diversification. Strengthening year-round offerings, improving infrastructure capacity, and promoting higher-value experiences can help balance demand while preserving long-term competitiveness. These measures are essential not only to manage overtourism risks but also to ensure tourism remains a stable pillar of Cyprus’ economic development.

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