Building material costs rise by 3%
Construction costs and property prices in Cyprus continued their upward trend in 2026, driven by higher building material costs, strong demand and sustained construction activity.
According to the Statistical Service of Cyprus (Cystat), the Construction Materials Price Index rose by 3% year-on-year in June 2026. Metal products recorded the largest increase at 5%, followed by timber products and insulation materials at 4%, while electromechanical equipment rose by 3% compared with June 2025.
Ask Wire CEO Pavlos Loizou attributed the increase in construction costs to higher international steel and copper prices, rising energy costs, supply chain pressures and continued strong activity in the construction sector.
Apartment prices continue to outpace houses
Figures from the Central Bank of Cyprus show that apartment prices increased by almost 10.8% year-on-year during the first quarter of 2026, while house prices rose by 3%.
Transaction data compiled by Ask Wire for the first half of 2026 also highlights significant regional differences in average apartment sale prices:
- Limassol: approximately €363,000
- Paphos: approximately €262,000
- Nicosia: approximately €183,000
- Larnaca: approximately €171,000
- Famagusta: approximately €150,000
Loizou said Limassol remains the country’s most expensive apartment market, largely due to modern seafront developments and high-value residential towers.
He noted that Nicosia, despite relying mainly on domestic demand, also recorded price growth compared with 2025.
According to Loizou, the average selling price of a two-bedroom apartment measuring around 75 to 90 square metres generally aligns with, or is slightly above, each district’s average. The final price depends on factors such as location, the age of the property, its energy efficiency rating and, in coastal districts, proximity to the sea.
Larnaca records the strongest growth
Loizou said Larnaca is currently experiencing the strongest annual price growth, with apartment values increasing by around 8.9%, while price growth has slowed in both Limassol and Paphos.
Ask Wire recorded 1,521 apartment transactions in Larnaca during the first half of 2026, the highest volume of any district.
He attributed the city’s strong performance to sustained foreign demand, relatively affordable prices compared with Limassol, infrastructure improvements and solid rental yields from modern, energy-efficient one and two-bedroom apartments near the coast.
Demand remains strong
Loizou said demand for apartments remains robust, with no signs of weakening.
Property transactions reached a 17-year high in 2025, with transfers valued at €4.7 billion. Momentum has continued into 2026, with sale contracts increasing by 13.8% during the first quarter.
Foreign buyers continue to drive the market, accounting for as much as 75% of transactions in Paphos, while domestic demand has also strengthened. Housing lending increased by 24.5%, while mortgage interest rates eased to around 3.15%.
Modern one and two-bedroom apartments close to the sea remain the most sought-after properties.
Market expected to remain resilient
Looking ahead, Loizou expects apartment prices to continue rising throughout 2026, although at a more moderate pace.
He forecasts annual growth of around 3% to 5% across Cyprus, with Larnaca likely to outperform other districts. Newer apartments with strong energy efficiency ratings are expected to see price increases of between 4% and 6%.
While lower interest rates are supporting demand, he said affordability pressures, limited housing supply and geopolitical uncertainty are likely to prevent another sharp surge in prices.
Luxury properties may underperform, as demand in that segment depends on more cautious high-income buyers.
Overall, Loizou expects the market to remain stable and resilient, with no indications of a price correction.
Also read: Audit finds irregular promotions and overtime in Limassol Municipality
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