**Cheaper Mortgages and Foreign Buyers Push Cyprus Property Prices Up**
*Limassol, Cyprus - June 24, 2026*
The property market in Cyprus has experienced significant growth in the first quarter of 2026, driven by a combination of cheaper mortgage rates and an influx of foreign buyers. According to data released by the Central Bank of Cyprus (CBC), apartment prices rose by 10.7% compared to the previous quarter, marking a notable increase in the real estate sector.
The broader residential property price index also saw an increase of 7.5% in Q1 2026, up from 7.1% in Q4 2025. This growth was primarily fueled by a surge in apartment prices, which climbed 10.8% during the same period. In contrast, the prices for detached houses saw a more modest increase of 3%.
Limassol, one of the key districts in Cyprus, reported the highest annual rise in apartment prices, with a notable increase of 10.7%. Larnaca followed closely, recording an overall apartment price growth of 11.7%, although this rate showed signs of slowing compared to previous quarters. Meanwhile, Paphos and Famagusta experienced more subdued growth rates of 6.4% and 1.3%, respectively. Nicosia's apartment prices remained stable at 3.0%.
The CBC highlighted that the robust demand for properties is largely driven by foreign buyers, particularly in Paphos, where they account for 75% of all purchases. Domestic buyers are more prevalent in Nicosia, making up 84% of the market, while Limassol and Famagusta see foreign buyers comprising around 60% of transactions. The Larnaca market appears to be more balanced, with local and overseas purchasers sharing the market equally.
One of the contributing factors to the rising property prices is the increase in construction costs, which has resulted in a gradual rise in housing supply. As the demand for properties continues to outpace supply, prices are expected to remain on an upward trajectory.
Mortgage lending trends further illustrate the growing interest in the property market. Net new lending for home loans surged by 24.5% year-on-year in Q1 2026, totaling €353.6 million compared to €284.1 million in the same period last year. The weighted average mortgage interest rate also saw a decline, dropping to 3.15% in March 2026 from 3.53% in March 2025. This decrease reflects the gradual easing of monetary policy by the European Central Bank (ECB) since mid-2024.
The CBC's bank lending survey indicated that demand for mortgages has exceeded banks' expectations, driven by rising consumer confidence. The market is being sustained by a mix of owner-occupier and buy-to-let demand, further contributing to the upward pressure on property prices.
As Cyprus continues to attract foreign investment and buyers, particularly from Europe, the real estate market is likely to remain dynamic. The ongoing trends in mortgage lending and property demand suggest that the upward momentum in property prices may persist in the coming quarters.
For potential homebuyers and investors, the current landscape presents both opportunities and challenges. While the prospect of owning property in Cyprus remains appealing, the rising prices may necessitate careful consideration and planning for those looking to enter the market.
As the situation evolves, stakeholders in the Cypriot property market will be closely monitoring these trends to adapt to the changing dynamics of supply and demand.