Cyprus is facing mounting pressure on property purchase and rental costs, with prices continuing to rise and the war in the Middle East expected to add further upward pressure, market representatives say.
Industry sources told Politis that the geopolitical crisis in the Middle East is affecting external demand for property and could lead to new increases in construction costs and property prices. For now, however, the impact has not reached levels that would cause serious concern. Data published recently by the Statistical Service of Cyprus and Eurostat point to an acceleration in house price growth.
“The conflict involving Iran is likely to affect property prices, particularly for buildings under construction. If, for example, supply chains are disrupted and the prices of raw materials and construction materials rise, construction costs will inevitably increase,” Landbank Group chief executive Andreas Christoforidis told Politis. “This would be worrying if the Iran crisis were to drag on and prices remained high for a prolonged period.”
Christoforidis said the Cypriot property market has shown resilience and has proved its strength through successive crises of different types over the past six years.
Referring to recent Eurostat data on house prices, he said the key issue was the stabilisation recorded in the fourth quarter of 2025 compared with the third quarter.
Increasing pressure
Recent Eurostat figures confirm that Cyprus is facing increasing pressure on the cost of buying and renting property, as part of a broader European trend that is now clearly affecting the country, said Mersina Isidorou, director general of the Cyprus Property Developers Association.
“The data highlight the need to strengthen affordable housing policies and confirm that the housing issue is one of the most significant challenges Cyprus has to manage,” she told Politis.
At the core of the problem, she added, lies an imbalance between supply and demand for housing units. Insufficient production of new homes, particularly during the 2013-to-2018 period, created a cumulative deficit that has yet to be covered. At the same time, demand continues to rise, while supply fails to keep pace, making price pressure inevitable.
The Property Developers Association has warned of the risks and stressed the need to continue and further strengthen efforts by the interior ministry and the Cyprus Land Development Corporation to increase the supply of affordable housing.
The president of the Cyprus Association of Property Valuers, Polys Kourousidis, told Politis that recent price increases remain within normal levels and are mainly linked to changes on the supply side of the market.
Looking ahead to 2026, he said the course of property prices will largely depend on the duration of the war, given its impact on external demand for real estate.
Impact of the war
Despite the strained geopolitical environment, including the conflict involving Iran, Christoforidis said the Cypriot property market has not been affected to a degree that would justify concern, let alone panic.
“The geopolitical crisis in the Middle East inevitably affects the investment climate, creating increased uncertainty at both local and international level,” Isidorou said. “In the short term, it is natural to see a more cautious stance from investors and businesses, with some investment decisions postponed until a clearer picture emerges. This affects capital flows and market momentum.”
She added that new dynamics also emerge in challenging environments. Cyprus, she said, has historically functioned as a stable and safe European investment destination, offering qualities investors seek in times of instability – political and economic stability, a clear institutional framework and access to the European market.
Kourousidis believes the war will also lead to higher construction costs, a trend that is already becoming visible. “I expect that after the war ends, there will be a sharp increase in demand from foreigners which, combined with higher construction costs, will lead to further rises in property prices,” he said. “The state’s housing policy must be intensified to ensure that home ownership remains achievable for Cypriots.”