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Limassol Maintains Rental Market Supremacy In Cyprus Amid Tight Supply

Limassol continues to define Cyprus’ property market with the highest rental values on the island, even as new construction projects proliferate. Recent market data reveal that the city’s average asking rent reached €3,057 per month this summer—more than double Larnaca’s €1,277—demonstrating both its robust economic appeal and the pressure exerted by a constricted housing supply.

Supply Shortages And Escalating Rent

Despite visible development and active construction, the city faces a severe shortage of long-term rental units. The available apartment listings plunged from 3,257 in January to 1,390 in July, with Limassol contributing 1,013 of these opportunities. Even Nicosia, with its larger population, offered only 191 units, underscoring the stark imbalance in rental availability.

National averages have also trended upward, as Cyprus’ general apartment rent reached €1,803 earlier this year compared to Limassol’s citywide average of €2,742. Within Limassol, one-bedroom apartments command an average of €1,651, two-bedrooms €2,574, and three-bedrooms €3,812; figures that would have been inconceivable just a few years ago. High-end coastal homes exceed €5,000 per month, while properties with four and five bedrooms average €7,224 and €7,750 respectively.

Construction Challenges And Strategic Response

Visible construction sites and cranes dot the cityscape. However, new units rarely transition into the long-term rental market, as many developments are sold directly to investors or pivot towards short-stay and mixed-use models. This phenomenon has contributed to the limited stock available for permanent residents, leaving the market pressures entrenched as indicated by Limassol’s minimal seasonal adjustment of -1.9%, reflecting that these challenges are structural rather than cyclical.

Policy Initiatives And Future Outlook

In response to these imbalances, policymakers are leveraging supply-expansion mechanisms, such as the affordable-rental housing scheme, which incentivizes developers to deliver units below market rents in exchange for increased building density. Through municipal partnerships and the efforts of the Cyprus Land Development Organisation (Koag), new affordable housing projects are in the pipeline for both Limassol and Nicosia. In Limassol alone, planned developments in Agios Nikolaos and Agios Ioannis will introduce approximately 600 apartments with rents set 25–30% below current market levels.

There has been significant interest in these state-supported initiatives. By August, 525 applications from young couples were submitted, with 152 approved for grants totalling €5.4 million. Similarly, the “Renovate-to-Rent” scheme recorded 43 applications, with 28 approved amounting to €727,000 in subsidies. Koag’s broader pipeline further includes more than 135 units for sale and 36 for rent scheduled for delivery in 2025, with additional phases planned for 2026 and beyond. Enhanced planning incentives offering bonus building densities between 25–45% are also part of the strategy to convert increased development into sustainable long-term housing.

Despite these policy measures, the central challenge persists: Limassol requires a substantial increase in long-term housing units to meet resident demand. Without a steady and meaningful augmentation of available units, rental rates are expected to remain high and market dynamics, unbalanced. Ultimately, while the mechanisms to address these challenges are in place, their successful execution will determine if the market can stabilize, or if Limassol will continue to dominate as the most expensive city in Cyprus.

Cyprus Residential Market Surpasses €2.5 Billion In 2025 With Apartments Leading the Way

Market Overview

In 2025, Cyprus’ newly built residential property market achieved a remarkable milestone, exceeding €2.5 billion. Data from Landbank Analytics indicates robust activity countrywide, with newly filed contracts reaching 7,819, including off-plan developments. This solid performance underscores the market’s resilience and dynamism across all districts.

Transaction Breakdown

The apartment sector clearly dominated the market, constituting 81.6% of transactions with 6,382 deals valued at €1.77 billion. In contrast, house sales represented a smaller segment, encompassing 1,437 transactions and generating €737.9 million. The record-high transaction was noted in Limassol, where an apartment sold for approximately €15.2 million, while the priciest house fetched roughly €6.2 million.

Regional Analysis

Nicosia: The capital recorded steady domestic demand with 2,171 new residential transactions. Apartments accounted for 1,836 deals generating €349.6 million, compared to 335 house transactions worth €105.5 million, anchoring Nicosia as a core market with average values of €190,000 for apartments and €315,000 for houses.

Limassol: As the island’s principal investment center, Limassol led overall activity with 2,207 transactions. Apartments dominated with 1,936 sales generating €824.1 million, while 271 house transactions added €157.9 million. The district enjoyed premium pricing, with apartments averaging over €425,000 and houses around €583,000.

Larnaca: This district maintained robust activity with a total of 2,020 transactions. The apartment segment realized 1,770 transactions worth €353 million, and houses contributed 250 deals valued at €96.3 million. Average prices hovered near €200,000 for apartments and €385,000 for houses, positioning Larnaca within the mid-market bracket.

Paphos: With a more balanced mix, Paphos completed 1,078 transactions. Ranking second in overall value at €503.2 million, the district saw house sales generate €287.8 million and apartments €215.4 million. Consequently, Paphos achieved the highest average house price at approximately €710,000 and an apartment average of €320,000, emphasizing its premium housing profile.

Famagusta: Distinguished by lower transaction volumes, Famagusta was the sole district where house sales outnumbered apartment deals. Out of 343 transactions, 176 involved houses (yielding €90.4 million) and 167 were apartments (at €32.4 million). The segment’s average prices were about €194,000 for apartments and over €513,000 for houses, signaling its focus on holiday residences and coastal developments.

Sector Insights and Forward View

Commenting on the report, Landbank Group CEO Andreas Christophorides remarked that the analysis demonstrates an ecosystem where apartments are the cornerstone of the real estate market. He emphasized, “The apartment sector is not merely a trend; it is the engine powering the country’s real estate market.” Christophorides also highlighted the diverse regional dynamics: Limassol leads in apartment pricing, Paphos commands premium house prices, Nicosia remains pivotal to domestic demand, Larnaca sustains competitive activity, and Famagusta caters to holiday home buyers.

In a market characterized by these varied profiles, informed monitoring of regional and sector-specific dynamics is crucial for investors aiming to make targeted and strategic decisions.

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