Limassol and Paphos are driving up property prices in Cyprus.

The real estate market in Cyprus is increasingly concentrating around two regions – Limassol and Paphos. This is where a large portion of foreign capital is directed, where new premium investments are being developed, and where attractive land for development is becoming increasingly scarce.

However, both markets are developing in slightly different ways. Limassol remains primarily a business center and a market for expensive apartments, while Paphos attracts both investors and those planning to relocate to Cyprus.

Limassol remains the most expensive market

Limassol has long been one of the most prestigious and expensive real estate markets on the island. Its role as Cyprus's business center, home to international technology, financial, and shipping companies, is crucial.

The presence of well-paid foreign workers translates into strong demand for rentals, especially in the segment of modern, high-standard apartments.

In prime coastal locations, prices are reaching levels significantly higher than they were just a few years ago. At the same time, developers continue to pursue new projects, even though the number of attractive plots is steadily decreasing.

Paphos is increasingly attracting investors

Paphos is developing according to a different model. The region has long been popular with those seeking holiday properties, but is also increasingly being chosen by those planning a permanent move.

The British are still a significant group of buyers, but there is also growing interest from customers from other parts of Europe, including Central Europe.

Paphos is increasingly difficult to consider solely as a cheaper and quieter alternative to Limassol. In the most attractive locations, luxury villas and sea-view properties command prices similar to those seen in the Limassol market.

There are fewer and fewer attractive plots of land

One of the most important factors linking Limassol and Paphos is the limited availability of land in prime locations.

The fewer attractive plots available for new development, the greater the share of property value represented by the land itself. This phenomenon is particularly evident near the coast and in the most sought-after districts of both regions.

For developers, this means more intensive use of available space. Valuable plots are increasingly being designated for apartment buildings, intimate complexes, or multiple premium properties instead of a single home.

Foreign capital is still very important

Cyprus remains attractive to buyers from outside the European Union, too. Formal restrictions on property acquisition have not eliminated interest in this market.

Investors are increasingly analyzing the type of project, development options, and location. Land suitable for the construction of several luxury villas or small estates is attracting particular interest.

It is the limited supply of such plots that may have an increasing impact on land prices in selected parts of Limassol and Paphos.

Two cities that are increasingly shaping the market

Limassol and Paphos don't compete for the same buyers. The former remains primarily a business and premium market, while the latter combines investment, vacation, and relocation functions.

However, there is one common element – a limited number of attractive properties and land with continued interest from foreign buyers.

This means that these two regions have an increasingly greater influence on the direction in which the Cypriot real estate market develops.

Sources: real estate market analysis – Kasia Gadomska.