The Cyprus real estate market eclipsed previous ceilings in 2025, with record-high transaction activity propelling the sector to an unprecedented total value of €6.5 billion, according to a report released on Thursday by PwC Cyprus.

In its annual report on the Cypriot real estate market, the company set out the main developments and trends that shaped the sector in 2025, while noting that the findings relate to market activity before the outbreak of the war in the Middle East.

This landmark performance saw the market reach new highs in both volume and value, with the total value of properties transacted rising by 8 per cent from €6bn in 2024.

The total number of transactions increased by 4 per cent to 25,600, while the average monthly transaction value climbed to €543 million, emphasising the market’s continued strength.

A supportive wider economic backdrop underpinned this growth, as Cyprus’ economy grew by a provisional 3.8 per cent in 2025, following strong performance the previous year.

Inflation slowed sharply to 0.8 per cent, and the economy continued to show resilience, helped by strong domestic consumption and improved financing conditions.

However, PwC pointed out that projections for 2026 had been prepared before the Iran conflict, which has since added fresh uncertainty to the outlook.

In the foreword, PwC Cyprus chief executive and chairman Philippos Soseilos said the publication provides a comprehensive analysis of the performance of the sector during 2025.

He noted that the analysis covers transaction activity across the island, with particular emphasis on the residential sector, property price trends and construction activity.

Soseilos said Cyprus continues to demonstrate resilience, supported by above-EU-average economic growth and successive credit rating upgrades.

He added that demand in the residential sector remained the primary driver of activity, while foreign investment showed renewed momentum across all districts.

Across the districts, almost all areas recorded growth, with Famagusta posting the strongest increase in transaction value at 27 per cent.

Paphos followed with a 17 per cent increase, while Nicosia and Larnaca both saw values rise by 15 per cent.

Limassol was the only district to register a decline, with a marginal 3 per cent drop, though it still dominated the market in value terms, accounting for 41 per cent of the total.

In volume terms, Nicosia and Limassol each made up 28 per cent of all transactions, followed by Larnaca and Paphos.

Residential real estate remained the market engine, reaching €4.5bn in transaction value, which represents 69 per cent of the total market.

PwC reported that approximately 15,900 apartments and houses were sold during the year, marking a 7 per cent increase overall.

Apartments were the main growth factor, accounting for 42 per cent of the total transaction value and 43 per cent of total transaction volume.

The analysis showed that apartment transactions alone contributed 60 per cent of the overall increase in value terms during the year.

This pattern was visible at the district level, with apartment transaction value in Nicosia rising to €529m and in Larnaca increasing to €500m.

In Paphos, apartment values climbed to €375m, while in Limassol they remained broadly stable at €1.2bn as transaction numbers continued to move higher.

Foreign buyer demand strengthened further in 2025, with the number of properties acquired by foreigners rising by 16 per cent to 7,255.

This meant foreign buyers accounted for around 28 per cent of all properties transacted, an increase from the 25 per cent recorded a year earlier.

Nicosia and Famagusta recorded the sharpest rise in foreign interest at 20 per cent each, followed by Larnaca, Paphos, and Limassol.

The coastal districts of Paphos, Larnaca and Limassol together accounted for about 80 per cent of the overall increase in properties acquired by foreigners.

Paphos and Limassol saw the highest concentration of contracts filed by foreign buyers, together making up 60 per cent of foreign transactions.

Notably, around 66 per cent of properties acquired by foreigners related to non-EU buyers.

Meanwhile, the luxury housing segment showed a steady presence, with 203 transactions involving residential properties valued above €1.5m.

These high-end deals had a combined value of €550m, representing 8 per cent of the sector’s total transaction value.

Limassol continued to lead the high-end residential property market, though its share declined as Paphos increased its share to 28 per cent.

Residential property index prices rose by 5 per cent, a trend linked to sustained domestic housing demand and the effects of rising construction costs.

A gradual moderation is expected in the future as supply increases, though demand is currently expected to remain positive.

Construction and development activity remained strong, with the number of new building permits increasing by 9 per cent from January to October 2025.

The total value of permits rose by 28 per cent, pointing to a strategic shift towards higher-quality, higher-value projects.

Significant growth was recorded in hotel and leisure developments, whereas the retail and warehouse sectors saw declines.

The construction materials index returned to an upward trend in 2025, rising by 1.3 per cent.

Constantinos Constantinou, real estate industry leader at PwC Cyprus, said the sector faces an imperative to adapt and transform.

He emphasised the need for a greater focus on sustainability, quality infrastructure, and long-term value creation.

Constantinou concluded that in a rapidly changing environment marked by geopolitical developments, market participants must reassess their priorities.

He urged stakeholders to align investment decisions with the country’s future needs as the impact of regional conflict remains uncertain.