The Cypriot economy is expected to maintain steady growth rates, with GDP rising by 3.5% in 2025 and stabilizing at around 3% during the 2026–2028 period. Inflationary pressures are expected to remain subdued, with the Harmonized Index of Consumer Prices (HICP) ranging between 0.8% and 2.2%, while core inflation is estimated to be around 1.8%–1.9%. The unemployment rate is projected to remain low, averaging around 4.5%, reflecting the tightness and continued resilience of the labor market.

While in 2025 we observed growth, more recent geopolitical complications in the wider Eastern Mediterranean region, have caused uncertainty and created a more sensitive global economic environment.

Gross Domestic Product (Growth Rate), Δ%Y

Harmonized Consumer Price Index (HCPI), Δ%Y

Unemployment Rate (of Total Labor Force), %Υ

Source: CYSTAT, CBC

p: CBC projections

The tourism sector showed impressive growth in 2025, with arrivals and revenue reaching record highs since 2001. Specifically, revenues from tourism in 2025 reached record levels increased by approximately 12.8% compared to 2024, while arrivals reached 4.5 million, marking an 8.8% increase year-on-year. At the same time, per capita spending increased by 3.8%, recording a slightly higher change compared to previous years.

Revenue and Arrivals of Tourists, Annual

Expenditure Per Person, Annual

Source: CYSTAT

New mortgage lending has shown pronounced cyclicality over the past decade, with a marked slowdown in 2020 and a correction in 2023, before rebounding strongly in 2025. It should be noted that, during this period, inflationary pressures and rising interest rates also weighed on borrowing activity and mortgage demand. Specifically, new mortgage loans increased by 23% year-on-year in 2025, reaching €1.338 billion, while total new lending rose by 18%. At the same time, the banking system continues to benefit from a strong deposit base, with deposits following an upward trend over time, while total loans have broadly stabilized following the deleveraging period.

New Loans, Volume & Δ% Yearly

Loans-to-Deposits Ratio (Yearly)

Source: CBC

Since 2017, non-performing loan (NPL) ratios have declined significantly, reflecting the consolidation of the banking system. Increased restructuring activity during the 2017–2020 period contributed substantially to the reduction in non-performing loans, while in recent years both NPLs and restructurings have stabilized. A significant portion of the decline is linked to portfolio sales.

NPL-to-Loans Ratio, All & Households, Monthly

Total DFAS Number by District, Quarterly

Source: CBC, DLS

Construction output has been on an upward trend since 2015, with positive growth rates were observed in 2024–2025 also. Construction prices and material costs rose sharply in 2021–2022 and have since remained at high levels, with mild fluctuations and a marginal decline in Q3 2025. Overall, the sector remains resilient despite increased costs. However, recent geopolitical developments in the Middle East are expected to exert upward pressure on energy costs, particularly oil prices, which may in turn lead to increases in construction and material costs, potentially affecting overall project viability and pricing levels in the short to medium term.

Construction Production & Output Price Indices, Quarterly

Price Index of Construction Materials, Quarterly

Source: CYSTAT

The market has historically been dominated by residential properties, both in terms of transaction volume and value, with a particularly sharp acceleration after 2021 and new all-time highs in 2022–2025. Land has also shown a strong increase in value since 2021, reflecting increased investment and development activity. Commercial real estate exhibited greater volatility, with a noticeable increase in value during the 2022–2024 period.

Total Number of transactions by Property Type, Quarterly

Total Declared Value by Property Type, Quarterly

Source: DLS Transactions (after a processing of data cleaning, including the removal of duplicates and DFAs entries.

s: subject to review

The changes indicate that the market is strengthened primarily in Larnaca, Paphos and Famagusta, while Nicosia is also recorded growth, but at a more stable rate. In contrast, Limassol presented a more moderate performance compared to the other districts. Nevertheless, at an overall level (including land, commercial properties, etc.), Nicosia and Limassol continued to account for the highest number of transactions, while Limassol stood out as the district with the highest transaction value. Overall, market growth appears to be more broadly distributed across Cyprus.

Change in the Number and Volume of Transactions (Declared Values) 2025 Vs 2024

Total Number of Transactions and Total Declared Value of Dwellings by District, Quarterly

Source: DLS Transactions (after a processing of data cleaning, including the removal of duplicates and DFAs entries.

s: subject to review

The comparison between declared, accepted and asking prices indicates a clear divergence between the levels at which transactions are concluded and sellers’ expectations. In 2025 asking prices were significantly higher across all districts, particularly in areas such as Limassol and Paphos, reflecting strong demand and heightened investment expectations. In contrast, Nicosia exhibited a more limited deviation, consistent with a more balanced and domestically driven market. It is noted, however, that the comparison is also influenced by the composition of the data, as Land Registry sales primarily relate to resale properties, due to the lack of available data for new units. By contrast, asking prices include a substantial proportion of new or under-construction properties, which tend to be priced at higher levels, thereby exerting upward pressure on median values.

Median Prices per m² in 2025

It should be noted that the observed divergence between asking and transaction prices may also be influenced by differences in the structure of the underlying data. Specifically, median transaction prices are based on properties within a defined floor area range (121–180 sq.m.), whereas asking prices relate to properties classified by the number of bedrooms (three-bedroom units), without a direct reference to floor area.

Declared and Accepted Prices: DLS

Asking Prices: Properties Available for Sale (22,675 listings) via the largest property platform in Cyprus – BuySell

The ranking of the districts differs between sales and asking prices, indicating variations in the composition of the supply. For example, while Larnaca recorded the lowest median price in resale transactions, it ranked higher in asking prices, a fact that is likely linked to the increased presence of new or under-construction apartments in the market. These units tend to be priced at higher levels, pushing median prices upward.

Median Prices per m² in 2025

Declared and Accepted Prices: DLS

Asking Prices: Properties Available for Sale (22,675 listings) via the largest property platform in Cyprus – BuySell

Sales of new residential units showed a strong increase, particularly in Larnaca, Pafos, and Famagusta, where there was a significant rise in both the number and volume of transactions. Nicosia was also on the rise, but at a more balanced pace. In contrast, Limassol showed a more subdued picture compared to the other districts.

Change in the Number and Volume of Transactions (Declared Values) 2025 Vs 2024

Total Number of Transactions and Total Declared Value of Dwellings by District, Quarterly

Source: DLS Transactions (after a processing of data cleaning, including the removal of duplicates and DFAs entries.

s: subject to review

Since 2020, there has been an increase in both the number of land transactions and the volume of sales (Declared Prices). In previous years, an increase was observed in the third quarter of 2017—a period prior to the imposition of VAT on plots of land, residential, and industrial parcels. Over time, residential and agricultural land have accounted for approximately 75%–80% of all land transactions.

Number of Land Transactions by Zone, quarterly

Land Declared Value by Zone, quarterly

Change in the Number and Volume of Transactions (Declared Values), 2025 Vs 2024

Source: DLS Transactions (after a processing of data cleaning, including the removal of duplicates and DFAs entries.

s: subject to review

The residential real estate market in Cyprus follows a cyclical pattern over time, with a cycle duration estimated at approximately 12–15 years. During the recession phase, significant price corrections are recorded, while during the recovery phase, correspondingly sharp increases are observed. The available residential property price indices (CYSTAT, Central Bank, RICS, and Neapolis Property Index) indicate that the market reached its lowest point around 2015, followed by a prolonged upward trend that continues to this day.

All Residential Property Indices in Cyprus, base2012Q1 = 100

Average of Residential Property Indices, Cyprus (base 2012Q1=100)

Given that the recession occurred in 2015, it is estimated that the market is now in the mature stage of the upward cycle, approaching its peak, with growth rates likely to slow in the coming period.

Source: CYSTAT, CBC, RICS, NUP

Notes: CYSTAT, CBC, RICS, and NUP indices rely on different datasets and methodologies, thus resulting in variations in trends.