**Larnaca Leads Cyprus Property Gains in Q2 2026**
Larnaca has emerged as the fastest-growing property market in Cyprus for the second quarter of 2026, showcasing significant gains across various property categories, including apartments, houses, offices, and warehouses. The latest index from the Royal Institution of Chartered Surveyors (RICS) and KPMG reveals that Larnaca's real estate market is thriving, driven by sustained demand for both residential and holiday properties.
According to the report, apartment values in Larnaca surged by 5.59% compared to the previous quarter, marking the most substantial increase among all districts. House prices also saw a notable rise of 4.48%, while office and warehouse values increased by 3.63% and 3.39%, respectively. This performance places Larnaca ahead of other districts in Cyprus, reflecting the overall strength of the island's residential market.
On a national scale, apartment values across Cyprus rose by 5.42% year-on-year, making them the strongest-performing property category. Warehouses followed with an annual increase of 4.22%, while houses and offices saw rises of 4.04% and 3.69%, respectively. In contrast, the retail sector lagged behind with a modest annual growth of just 0.66%.
Christophoros Anayiotos, a board member at KPMG Cyprus and head of the real estate industry group, emphasized the strong performance of apartments, calling them "the strongest-performing asset class." He noted that the increases in house values, particularly in Larnaca and Paphos, reflect ongoing residential demand.
The disparity between Larnaca and other districts is significant. For instance, apartment values in Limassol increased by only 2.04%, followed by Paphos at 1.94% and Famagusta at 0.79%. In Nicosia, apartment values remained unchanged. A similar trend was observed for houses, with Paphos recording a 2.22% increase, Limassol at 1.78%, and Famagusta at 0.41%, while Nicosia again showed no change.
Commercial property performance varied across the island, but Larnaca maintained its lead. Office values in Limassol rose by 1.50%, while Paphos and Nicosia saw increases of 0.71% and 0.63%, respectively. Famagusta experienced no change in office values. Warehouse prices also increased in Paphos (2.38%), Limassol (1.44%), and Nicosia (0.89%), with no change in Famagusta. Retail properties continued to underperform, with Paphos leading the quarterly increase at 1.08%, followed by Limassol at 0.84% and Larnaca at 0.30%.
Anayiotos commented on the mixed performance of commercial properties, stating that while office values showed moderate increases led by Larnaca, warehouse values benefited from gains in both Larnaca and Paphos. However, retail properties remain the weakest asset class, with demand trailing behind the rest of the market.
Larnaca's property market strength is also reflected in the holiday property sector, which has seen continued demand linked to Cyprus' tourism industry. Nationally, holiday apartment prices increased by 5.18% year-on-year, outperforming holiday houses, which rose by 3.01%. On a quarterly basis, Larnaca led once again, with holiday apartment prices increasing by 3.85% and holiday house values rising by 3.1%. Paphos followed with a 2.52% increase in holiday apartment prices, while Limassol and Famagusta recorded increases of 1.73% and 0.63%, respectively. For holiday houses, Famagusta saw a 1.39% increase, followed by Paphos at 1.11% and Limassol at 0.36%.
RICS chief economist Simon Rubinsohn noted that concerns regarding geopolitical developments affecting Cyprus' tourism industry had not materialized, as holiday property prices continued to rise. He also highlighted signs of improvement in commercial property, citing a modest improvement in sentiment and stronger overseas investment inquiries following a weaker first quarter.
The increase in property prices has been accompanied by a rise in rental values, particularly for apartments, which climbed by 7.36% year-on-year. Holiday apartment rents rose by 6.43%, while rents for houses and holiday houses increased by 5.3% and 5.19%, respectively. Office rents were up by 4%, followed by warehouses at 1.96% and retail properties at 1.22%. Despite the rise in rents, yields remained relatively unchanged from the previous year. Holiday apartments offered the highest yield at 5.82%, closely followed by retail properties at 5.78% and offices at 5.63%. Apartment yields stood at 5.51%, while warehouses generated 4.15%. Houses and holiday houses remained at the lower end of the market, with yields of 3.01% and 2.85%, respectively.
In summary, Larnaca's property market has shown remarkable growth in the second quarter of 2026, leading the way in various property categories and reflecting a robust demand for both residential and holiday properties across Cyprus.