Cyprus real estate shifts toward a multi-speed regional model

Landbank Group CEO warns against broad restrictions on foreign investmentCyprus’ property market is evolving beyond a single national narrative, with regional differences, affordability pressures and changing buyer priorities increasingly defining its direction. At the same time, policymakers and industry leaders are grappling with how to sustain growth while ensuring housing remains accessible, planning becomes more efficient and development keeps pace with the country’s long-term needs. In an exclusive interview with the Sunday Mail, Landbank Group chief executive officer Andreas Christophorides examined the forces reshaping the market, from shifting demand and rising construction costs to foreign investment, sustainability and the structural reforms he believes are needed to secure the sector’s future. With the Cyprus market splitting into distinct segments, what is the current situation across the different districts? Cyprus can no longer be analysed as one single real estate market. What we see today is a clear multi-speed market, with each district developing its own profile. Limassol remains the premium, capital-intensive market, attracting high-value transactions and international demand. Nicosia is more stable and domestic-driven, with stronger affordability and consistent demand from local buyers. Larnaca combines volume with competitive prices, making it one of the most interesting emerging markets. Paphos is increasingly associated with lifestyle and luxury housing, especially in houses and villas. Famagusta remains more selective and tourism-oriented, with lower transaction volumes but strong interest in holiday homes and coastal developments. The Q1 2026 data confirms this segmentation. Across Cyprus, 1,726 residential transactions were recorded, with a total value of €540 million and an average deal value of approximately €313,000. However, the picture changes significantly by district. Larnaca and Nicosia remain strongly apartment-led markets, while Paphos shows a much stronger housing profile, combining a meaningful share of house transactions with higher ticket sizes. Famagusta also stands out because its activity is almost evenly split between apartments and houses, reflecting its more tourism and holiday-home oriented character. Is the housing shortage mainly due to planning delays or lack of viable development land? It is a combination of both, but planning delays are probably the more immediate bottleneck. Cyprus does have land, but not all land is suitable, serviced, correctly zoned or economically viable for residential development. At the same time, delays in permits, infrastructure, zoning updates and planning procedures slow down the delivery of new supply. The public sector can help by accelerating permitting, upgrading infrastructure in growth areas and creating clearer incentives for affordable and mid-market housing. Some steps were taken towards that direction, but their actual implementation remains weak. The industry also needs better alignment between what is being developed and what buyers can actually afford. Have local buyers shifted their preferred asset class? Yes. Local buyers are increasingly focused on apartments, mainly because houses have moved into higher price brackets. Apartments have become the main entry point for first-time buyers, families and small investors. In 2025, apartments accounted for more than eight in ten new residential sales, confirming that they are now the driving force of the market. However, many large-scale developers, especially in coastal areas, continue to push higher-end projects, luxury apartments and premium housing. This creates a gap between mass domestic demand and the product being delivered in some locations. This shift is also visible in the Q1 2026 data. Apartments accounted for 1,409 transactions, compared with 317 house transactions. In other words, apartments continue to drive market liquidity. At the same time, houses absorb higher capital per transaction, with an average deal value of around €507,000 compared with approximately €269,000 for apartments. This shows that local and investment demand is increasingly concentrated in apartments, while houses are moving further into higher-ticket territory. The price-band data is also particularly revealing. More than half of all apartment transactions in Q1 2026 were concentrated between €150,000 and €300,000, showing where real demand currently sits. For houses, the core market is higher, with almost 45 per cent of transactions in the €300,000 to €500,000 range and a meaningful premium segment above €1 million. This suggests that affordability remains central for apartment buyers, while house buyers are either family buyers with stronger purchasing power or investors targeting higher-value assets. How are resilient developers managing construction costs? Cutting quality is definitely not the answer. Developers should be redesigning projects more intelligently. This could mean smaller but better-planned units, phased developments, tighter procurement, earlier locking of material prices, stronger supplier relationships and more disciplined project selection. They should also focus on locations where demand is already proven, rather than relying only on speculative future growth. The key is not to build cheaper, but to build smarter, with a clearer understanding of the buyer’s price ceiling. What could be the economic consequences of stricter limits on foreign investment? Foreign investment plays an important role in liquidity, construction activity, employment, professional services, consumption and government revenues. Stricter limits could reduce demand in high-value segments, especially in Limassol, Paphos and coastal areas. That may ease some price pressure in certain locations, but it could also slow new development, reduce investor confidence and affect sectors connected directly or indirectly to real estate. The better approach is not necessarily to restrict foreign investment broadly, but to channel it more strategically, while also protecting the availability of affordable housing for local buyers. The Cyprus real estate sector is changing radically towards a strengthen and more viable model. The sector needs time to adjust to such a big change, stopping this growth momentum is not the answer and in the long term it won’t be to the benefit of the economy or the society. How have interest rates affected first-time buyers, and could geopolitical risk create a rush for loans? Higher interest rates made it harder for first-time buyers to enter the market, particularly those dependent on mortgage finance. This has strengthened demand for smaller apartments and, in some cases, pushed households toward renting for longer. As rates started easing, demand from local buyers began to recover. Regarding the war in Iran and geopolitical uncertainty, the market is watching developments calmly. There may be short-term caution, but Cyprus has shown resilience in previous crises. If buyers believe rates could rise even more over the next six to eighteen months, some may move faster to secure financing, but a broad rush for loans would depend on bank pricing, confidence and the duration of the uncertainty. Of course, if our mentality was less opportunistic, we would prefer loans with fixed interest rates so that we wouldn’t be affected by fluctuations or ECB policy decisions but we still prefer to gamble a bit… Is appetite for green or energy-efficient buildings increasing? Yes, especially for commercial buildings, but overall the market is still developing. Buyers increasingly understand that energy-efficient homes reduce long-term running costs, especially with electricity prices remaining a concern. Developers also recognise that better energy performance can support pricing and marketability. However, for many domestic buyers, affordability still comes first. Green buildings will gain more traction when the market sees them not as a premium feature, but as a practical way to reduce monthly living costs and protect long-term property value. What is the future of mixed-use developments in Nicosia versus coastal cities? Nicosia has strong potential for practical, urban mixed-use developments because demand is year-round and driven by residents, students, professionals and businesses. Mixed-use in Nicosia can support everyday life: housing, offices, services, retail and leisure in the same area. In coastal cities, mixed-use projects are more likely to be linked to tourism, lifestyle, hospitality and premium residential demand. Limassol and Paphos will continue to attract higher-end mixed-use concepts, while Nicosia’s opportunity lies in more functional, community-oriented urban regeneration. What structural reform would improve long-term market stability? The most important reform would be the creation of a faster, more transparent and data-driven planning and permitting framework. Cyprus needs better visibility on supply, demand, zoning capacity, infrastructure needs and affordability gaps. Faster permitting alone is not enough. Decisions must be based on real market data. A more predictable planning system would reduce uncertainty, improve housing supply, support investment and help prevent imbalances between luxury development and the real needs of the domestic market.