The Central Bank of Cyprus (CBC) has released its Residential Property Price Index (RPPI) for the fourth quarter of 2025, recording accelerating price growth across the Cyprus residential market. The acceleration is driven by sustained strong demand from both local and foreign buyers, a gradual increase in housing supply, and construction costs that remain at historically elevated levels.

• Quarterly Growth:
  • The overall residential property price index rose by 2.3% quarter-on-quarter, a significant acceleration from 1.2% in Q3 2025.
  • House prices increased by 1.2% on a quarterly basis.
  • Apartment prices recorded an accelerating quarterly increase of 3.0%, compared to 1.7% in Q3 2025.
• Annual Growth:
  • On an annual basis, the overall index increased by 7.1%, accelerating from 5.0% in Q3 2025.
  • House prices grew by 3.4% year-on-year, an acceleration from 2.6% in the prior quarter.
  • Apartment prices accelerated sharply to 9.6% annual growth, up from 6.4% in Q3 2025.
• Regional Trends:
  • Nicosia: The general index returned to positive territory at +1.0% year-on-year after the -0.5% recorded in Q3; apartment prices accelerated to 3.0% while house prices declined -1.3% — a fifth consecutive quarter of annual decline in the detached housing segment.
  • Limassol: The general index accelerated to 9.9% year-on-year; apartment prices rose 9.3% (accelerating) and house prices 6.0% (accelerating).
  • Larnaca: The general index accelerated to 8.3% year-on-year; apartment prices surged 12.2% (accelerating) and house prices rose 4.5% (accelerating).
  • Paphos: The general index decelerated to 7.6% year-on-year; apartment prices accelerated to 13.6% — the highest district rate — while house prices decelerated to 4.0%.
  • Famagusta: The general index was flat at 0.0% year-on-year, unchanged from Q4 2024; apartment prices declined -4.1% while house prices returned to positive territory at +1.9% following a -1.6% decline in Q3.
• Demand:
  • Total sales contracts across all property types reached 4,941 in Q4 2025, a significant year-on-year increase of 18.7% (from 4,163 in Q4 2024).
  • Local buyer transactions rose 15.3% year-on-year to 2,901 contracts.
  • Foreign buyer transactions increased 23.9% year-on-year to 2,040 contracts; Paphos recorded the highest foreign buyer share at 68% of all district transactions.
• Supply:
  • Residential building permits for the period January–November 2025 increased by 36.1% year-on-year, from 10,584 to 14,401 units, signalling a substantial pipeline of future supply in the medium term.
  • The construction activity diffusion index remained positive for the ninth consecutive quarter at 14.4%, consistent with sustained and broadening construction momentum.
• Financing Conditions:
  • New housing loan volumes rose by 26.1% year-on-year in Q4 2025, with total new lending for full-year 2025 reaching a record €1,338.2m compared to €1,087.2m in 2024 — a 23.1% annual increase.
  • The weighted average mortgage interest rate fell to 3.12% in December 2025, down from 4.30% in December 2024, reflecting the gradual easing of ECB monetary policy since mid-2024.
• Market Outlook:
  • The European Commission Business Survey price expectations index rose to 29.1 in Q4 2025 from 25.5 a year earlier, indicating a larger share of market participants expects price increases over the short term.
  • The Q4 2025 data signals a broad-based re-acceleration of the Cyprus residential market. Apartment prices are the dominant driver, posting double-digit annual gains in Larnaca (+12.2%) and Paphos (+13.6%), supported by a structural demand shift toward smaller units and ongoing foreign investor appetite — particularly in Paphos where foreigners account for 68% of transactions. The record-breaking building permit pipeline (+36.1%) is a positive signal for medium-term supply, though elevated construction costs and reported labour shortages in the sector are likely to limit the speed at which new units reach the market. Nicosia house prices remain the single outlier, posting a fifth consecutive annual decline, while the capital's apartment segment has returned to positive growth.

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