Paphos emerges as property hotspot for foreign buyers, accounting for 68 per cent of sales

Sales of property to foreign buyers surged in the third quarter of 2025, according to the Residential Property Price Index (RPPI) report published on Tuesday by the Central Bank of Cyprus (CBC).

The total number of sales documents recorded by the Department of Land and Surveying (DLS) during the third quarter of 2025 showed an annual increase from both domestic and foreign buyers.

Specifically, the number of properties sold to foreign buyers increased by 9.3 per cent year-on-year, rising from 1,672 in the third quarter of 2024 to 1,827 in the quarter under review.

Sales to domestic buyers also contributed to the overall market strength, recording an annual increase of 8.6 per cent, rising from 2,409 to 2,617.

Overall, the total number of sales documents, which covers all property types, recorded an 8.9 per cent annual increase to 4,444 in the third quarter of 2025, compared with 4,081 in the third quarter of 2024.

Across districts, the majority of transactions were concentrated in Limassol (1,431), followed by Nicosia (981), Larnaca (921), and Paphos (878), with Famagusta recording the lowest number of transactions at 233.

The dominance of foreign buyers was most pronounced in Paphos, where 68 per cent of buyers were from abroad.

On the other hand, the majority of buyers in Nicosia, Limassol, Larnaca, and Famagusta were domestic, exceeding 50 per cent in those districts.

The General Residential Property Price Index (RPPI) continued to record an annual increase in the third quarter of 2025, with an accelerated rise in apartment prices and a decelerated rise in house prices.

Overall, residential property prices recorded an annual increase of 5.0 per cent in the third quarter of 2025, compared with an increase of 4.7 per cent in the second quarter of 2025.

Apartment prices saw an acceleration in growth to 6.4 per cent, while house prices decelerated to 2.6 per cent during the period.

Quarterly, the General RPPI recorded an increase of 1.2 per cent, down from the 1.5 per cent increase seen in the second quarter of 2025.

This quarterly change was derived from a decelerated 1.7 per cent quarterly increase in apartment prices and a small 0.4 per cent increase in house prices.

In terms of annual price changes by district, the pace of increase accelerated in Limassol (7.1 per cent) and Larnaca (7.3 per cent).

Nicosia and Famagusta saw small decreases in the general property price index of -0.5 per cent and -0.3 per cent, respectively.

Paphos recorded a deceleration in its general property price index, though still posting a high 8.9 per cent annual increase.

By property type, annual house prices saw deceleration in Limassol and Paphos, to 5.5 per cent and 7.4 per cent respectively, while Larnaca continued to record the same annual growth rate of 4.2 per cent.

The Famagusta district recorded an annual decrease in house prices of -1.6 per cent, while house prices in Nicosia recorded an annual decrease of -2.7 per cent for the fourth consecutive quarter.

Apartment prices showed accelerated annual growth in all districts except Nicosia, which recorded the same annual rate of 2.6 per cent as the previous quarter.

Specifically, apartment prices saw accelerated annual increases of 5 per cent in Limassol, 9.6 per cent in Larnaca, 10.5 per cent in Paphos, and 5.9 per cent in Famagusta.

The positive path for demand reflects the shift in preferences towards smaller properties due to increased construction costs.

Lending data supports the positive market developments, with the volume of new residential loan issuance recording a significant annual increase of 22 per cent for the January to September 2025 period, totalling €972 million compared with €796.8 million in the corresponding period of 2024.

For the third quarter of 2025 alone, the annual rise in new residential loan issuance reached 24 per cent compared with the third quarter of 2024.

The weighted average interest rate for housing loans decreased to 3.03 per cent in September 2025, down from 4.27 per cent in September 2024, supporting both demand and the gradual increase in the supply of residential properties.

The number of residential units for which building permits were approved, a leading indicator of construction activity, recorded an annual increase of 4.6 per cent for the January to July 2025 period, rising from 7,772 units in 2024 to 8,128 units in 2025.

This suggests that a gradual increase in the supply of residential units is expected in the medium term.

The price index for construction materials recorded a marginal annual increase of 1.3 per cent in the third quarter of 2025, remaining at historically high levels due to geopolitical developments and supply chain disruptions.

The expectations index for property prices for the next three months, recorded in the European Commission’s Economic Sentiment Surveys (September 2025), indicates a continuing trend of deceleration in house prices as a smaller percentage of participants expect increases.