Cyprus real estate market undergoes major shift toward high-density residential development

During the first half of 2026, the Cypriot construction sector has undergone a significant transformation, characterized by a shift away from large commercial projects toward high-density residential housing. According to data from the Statistical Service of Cyprus (Cystat), 11,100 housing units were authorized in this period, with 8,669 (78%) being apartment units. This represents a massive increase compared to 2016; the total area for apartment buildings reached 1.51 million square meters in 2026, a 1,112% rise in physical volume over the last decade.

The real estate sector is facing rapid price growth, with Eurostat reporting an increase of 7.9% in house prices during the second quarter of 2026, significantly higher than the 4.7% EU average. Sales transactions also rose by 17.1%. Furthermore, data from the Central Bank of Cyprus shows an 8.5% year-on-year rise in property prices during the same period. The market is becoming increasingly internationalized, with foreign buyers now constituting the majority in Paphos, approaching 50% in Larnaca, and maintaining balanced levels in Famagusta.

While developers are maximizing land utility through vertical construction, analysts express concern regarding housing affordability for local residents. Future trends suggest continued upward pressure on costs for construction materials, increased demand for mortgage loans, and a sustained supply of new residential units in the coming months.