Larnaca has firmly established itself as a dominant force in the Cyprus real estate market, registering the highest property value increases in the first quarter of 2025. According to the latest RICS Cyprus Property Price Index, compiled in collaboration with KPMG Cyprus, the city has outperformed other districts with significant advances across several property categories.
Market Overview and Key Trends
Christophoros Anayiotos, Managing Director and Head of Real Estate and Land Development at KPMG Cyprus, noted that Larnaca recorded the strongest gains in office spaces, followed closely by residential properties, including apartments and houses. These gains outpaced more modest increases observed in other regions such as Nicosia, Limassol, Paphos, and Famagusta, which displayed varied growth profiles.
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Notably, while warehouses experienced minimal quarterly gains, commercial properties—particularly retail outlets—continued their downward trend, mirroring patterns from previous quarters. In sharp contrast, apartments in Larnaca registered the most notable quarterly and annual growth across all sectors.
Rental Market Dynamics and Yield Stability
The rental market in Cyprus also showed upward momentum, with office spaces leading the surge in rental prices, followed by apartments and houses. Even holiday properties experienced modest rental increases, though retail rental prices declined, reinforcing the subdued performance of commercial sales observed in the overall market.
Yields across the property types remained broadly stable, with office properties showing the only significant variation. This stability suggests a resilient market response amid evolving economic conditions.
Economic Resilience Amid Global Uncertainty
Chief Economist Simon Rubinsohn of RICS has underscored the relative stability of the Cypriot property market in the face of global economic challenges. He observed, “The Cypriot economy has so far remained resilient despite rising geopolitical tensions,” while cautioning that increased global macroeconomic uncertainty could set the stage for a more challenging policy environment.
Conclusion
Despite the complexities of the global economic landscape, the evidence from Q1 2025 confirms that Larnaca continues to be the market leader in Cyprus real estate. With robust growth in both sales and rentals, driven by high demand in offices, apartments, and houses, Larnaca is set to remain the focal point for investors and stakeholders looking for stable, long-term returns in an uncertain global market.
