**Larnaca Takes the Lead as Property Values Rise**
Larnaca has emerged as the frontrunner in Cyprus' property market during the second quarter of 2026, showcasing substantial growth in various property categories, particularly in apartments and offices. This upward trend is highlighted in the latest property index released by the Royal Institution of Chartered Surveyors (RICS) in collaboration with KPMG, which indicates a general increase in property prices across most districts in Cyprus.
Christophoros Anayiotos, a board member of KPMG and head of the real estate industry group, noted the resilience of the Cypriot property market. He stated, “During the second quarter of 2026, the Cyprus property market continued to demonstrate resilience, with positive price movements recorded across most districts and asset categories.” The report indicates that apartments have been the strongest-performing asset class, with Larnaca leading the way in growth.
In addition to apartments, housing values have also seen positive gains, particularly in Larnaca and Paphos. This trend reflects a sustained demand in the residential sector, which has been bolstered by the ongoing interest in property investments within these areas. Anayiotos remarked on the performance of commercial properties, noting that while there were moderate increases in office spaces, Larnaca again stood out with the strongest growth in this category. Warehouses have also benefited from notable gains, particularly in Larnaca and Paphos.
However, the retail sector has not fared as well as other property categories. Anayiotos pointed out that retail properties have remained the weakest-performing asset class, with only modest growth observed in most districts and a slight decline noted in Famagusta. This suggests that the demand for retail spaces continues to lag behind other sectors of the property market.
The rental market has also shown positive trends, with rental values maintaining an upward trajectory. Apartments have recorded the most significant annual increases, followed by holiday properties and houses. The holiday property sector, in particular, has remained robust, with holiday apartments outperforming holiday houses, underscoring the ongoing strength of Cyprus’ tourism market.
Anayiotos summarized the current market conditions by stating, “The second quarter reflects a stable and healthy market environment, underpinned by sustained demand for residential and holiday assets, while commercial properties continue to show selective growth, albeit with retail remaining the least favored asset class.”
The overall economic landscape in Cyprus continues to exhibit resilience, as noted by RICS chief economist Simon Rubinsohn. He commented on the property index results, stating, “The Cypriot economy continues to demonstrate considerable resilience in the face of the ongoing geopolitical challenges.” Rubinsohn emphasized that concerns regarding the impact of geopolitical issues on the tourism industry have not materialized, as evidenced by the continued upward movement in holiday-related property prices.
Furthermore, the commercial property market has shown signs of improvement after a weaker start to the year. Rubinsohn highlighted that the RICS Cyprus Commercial Property Monitor reflects a modest improvement in sentiment in recent months, alongside an uptick in overseas investment inquiries following a softer first quarter.
As Larnaca continues to lead the charge in property value increases, the broader Cypriot market demonstrates a positive outlook, driven by strong demand across residential and holiday property sectors. The resilience shown in the face of economic challenges suggests a stable environment for both local and international investors in the coming months.