The Central Bank of Cyprus (CBC) has released its Residential Property Price Index (RPPI) for the second quarter of 2025, confirming continued price growth across the Cyprus residential market, driven primarily by strong apartment price momentum and robust transaction activity.

Key Highlights:

• Quarterly Growth:
  • The overall residential property price index rose by 1.5% quarter-on-quarter, compared to 1.9% in Q1 2025.
  • House prices edged down marginally by 0.1% on a quarterly basis.
  • Apartment prices recorded an accelerating quarterly increase of 3.1%.
• Annual Growth:
  • On an annual basis, the overall index increased by 4.7%, broadly in line with the 4.8% recorded in Q1 2025.
  • House prices grew by 3.4% year-on-year, a deceleration from the prior quarter.
  • Apartment prices accelerated to 5.3% annual growth, up from 3.5% in Q1 2025.
• Regional Trends:
  • Nicosia: Marginal overall annual growth of 0.1%; house prices declined for the third consecutive quarter (-1.6%), while apartment prices rose by 2.6%.
  • Limassol: The only district to record an accelerating annual growth rate at 6.8%; apartment prices up 4.8% and house prices up 6.0% year-on-year.
  • Larnaca: Annual growth of 5.8%; apartment prices accelerated to 8.2% while house prices increased by 4.2%.
  • Paphos: Annual growth of 9.4%, with apartment prices up 8.0% and house prices up 9.8% year-on-year — the highest annual growth rate among all districts.
  • Famagusta: Annual growth of 4.9%; apartment prices up 4.5% and house prices up 5.7% year-on-year.
• Demand:
  • Total sales contracts across all property types reached 4,592 in Q2 2025, a year-on-year increase of 16.1% (from 3,956 in Q2 2024).
  • Local buyer transactions rose 15.1% year-on-year to 2,875 contracts.
  • Foreign buyer transactions increased 17.8% year-on-year to 1,717 contracts, with Paphos remaining the only district where foreign buyers account for the majority of purchases (60%).
• Supply:
  • Residential building permits for the period January–April 2025 increased by 12.1% year-on-year, from 3,854 to 4,321 units, pointing to a gradual expansion of supply in the medium term.
  • The construction activity diffusion index remained positive for the seventh consecutive quarter (4%), consistent with sustained building activity.
• Financing Conditions:
  • New housing loan volumes rose significantly by 22.2% year-on-year, reaching €353.5 million in Q2 2025 compared to €289.3 million in Q2 2024.
  • The average mortgage interest rate fell to 3.85% in Q2 2025, down from 4.58% in Q2 2024, supporting both demand and the gradual increase in housing supply.
• Market Outlook:
  • The European Commission Business Survey price expectations index for the next three months declined markedly to 22.2 in Q2 2025 from 62.8 a year earlier, indicating that significantly fewer market participants expect price increases over the short term.
  • While headline growth remains positive, the combination of decelerating expectations, rising supply, and the absence of new demand-side stimulus suggests the market is entering a more measured phase. Paphos and Larnaca apartment segments continue to outperform, while the Nicosia house market warrants closer monitoring given its third consecutive quarterly decline.

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