Investing in Cyprus: Top Neighborhoods to Target

Published on October 1, 2025 and written by Cyril Jarnias

Cyprus, a Mediterranean island at the crossroads of Europe, Asia, and Africa, is increasingly attracting international real estate investors. With its sunny climate, sandy beaches, and pleasant living environment, the island offers numerous real estate investment opportunities. Whether you’re looking for a vacation home or a profitable rental investment, discover the most promising neighborhoods in Cyprus for investing in 2025 and beyond.

Limassol: The Jewel of the South Coast

Limassol, Cyprus’s second-largest city, stands out as the premier destination for real estate investors. Its economic dynamism, modern infrastructure, and cosmopolitan living environment make it a top choice.

The Germasogeia neighborhood, located east of the city center, is experiencing rapid development. Numerous high-end real estate projects are emerging there, offering apartments and villas with sea views. Prices per square meter range between €3,000 and €5,000, with promising medium-term capital gains prospects.

Further west, the Neapolis neighborhood attracts investors due to its proximity to the university and the new casino-resort. Student housing and furnished apartments for short-term rentals are particularly in demand, with rental yields potentially reaching 6 to 8% per year.

Paphos: The Charm of the West Coast

Located on the island’s west coast, Paphos captivates with its more relaxed atmosphere and UNESCO World Heritage historical sites. The city attracts many British and Northern European retirees, creating sustained demand for residential real estate.

The Kato Paphos neighborhood, by the sea, concentrates most of the tourist activity. Apartments with harbor views offer excellent opportunities for seasonal rentals, with occupancy rates exceeding 80% during peak season. Prices per square meter range between €2,500 and €4,000 depending on location and amenities.

Further north, the Coral Bay area is developing rapidly with the construction of numerous high-end villas. Investors find spacious properties with private pools, ideal for long-term rentals to an international clientele. Annual rental yields for this type of property can reach 5 to 6%.

Larnaca: The Emergence of a New Attractive Hub

Long overshadowed by Limassol and Paphos, Larnaca has experienced a spectacular revival in recent years. The modernization of its international airport and the development of its marina make it an increasingly popular destination for investors.

The Finikoudes neighborhood, along the seaside promenade, concentrates most of the new constructions. Modern residential complexes are emerging there, offering apartments with stunning Mediterranean views. Prices per square meter, still attractive, range between €2,000 and €3,500 with significant capital gains potential.

A few kilometers south of the city center, the Mackenzie Beach area is attracting the attention of real estate developers. New hotel and residential projects are under development there, suggesting strong appreciation in the coming years. Savvy investors can acquire off-plan properties at advantageous rates.

Nicosia: The Capital in Transformation

The only major city in Cyprus not located by the sea, Nicosia nonetheless remains an attractive destination for real estate investment. The island’s capital is undergoing a major urban transformation, with numerous renovation and construction projects.

The Nicosia City Center business district attracts investors looking for commercial properties and offices. Rental demand there is strong, driven by the establishment of many international companies. Rental yields for office spaces can reach 7 to 8% per year.

Further south, the residential neighborhood of Engomi appeals to an affluent clientele with its modern villas and high-end apartments. Proximity to universities also makes it a wise choice for student rental investment. Prices per square meter range between €2,500 and €4,000 depending on amenities.

Future Prospects of the Cypriot Real Estate Market

The Cypriot real estate market shows encouraging prospects for the coming years. Several factors contribute to this positive dynamic:

• The sustained economic growth of the island, with GDP rising by 3.5% on average per year since 2020
• The tax attractiveness of Cyprus, which attracts many international investors and entrepreneurs
• The development of high-end tourism, stimulating demand for second homes and seasonal rentals
• Massive investments in infrastructure, particularly in the energy and transportation sectors

According to expert forecasts, real estate prices in Cyprus are expected to continue increasing by 4 to 6% per year on average during the 2025-2030 period. Coastal cities like Limassol and Paphos are expected to see the highest increases, while Nicosia and Larnaca still offer purchase opportunities at more affordable prices.

The rental market should also remain dynamic, driven by demand from expatriates, international students, and tourists. Average rental yields in Cyprus range between 4 and 7% per year, with peaks of 8-10% for some well-located and well-managed properties.

Keys to Successful Real Estate Investment in Cyprus

To maximize the chances of success for your real estate investment in Cyprus, here are some essential tips:

• Prioritize developing areas offering good capital gains potential, such as the new neighborhoods of Limassol or the Larnaca marina
• Diversify your portfolio by combining different types of properties (apartments, villas, commercial spaces) and strategies (long-term rental, seasonal rental)
• Engage a local specialized lawyer to secure your transactions and ensure the legal compliance of your investments
• Anticipate additional costs related to property purchase in Cyprus, including notary fees (approximately 1% of the purchase price) and property transfer tax (between 3 and 8% depending on the property value)
• Consider establishing a Cypriot company to optimize the management and taxation of your real estate investments

By following these recommendations and carefully choosing your locations, you can fully leverage the potential of the Cypriot real estate market and generate attractive long-term income.