Best Cities for Property Investment in Cyprus

Cyprus is considered the pearl of the Mediterranean for its comfortable climate and attractive investment conditions. The island's coast is almost an unbroken line of beaches, making Cyprus a popular destination for tourists worldwide. But first things first.

The authorities of the Republic of Cyprus are trying to create more opportunities for property investment in Cyprus. In particular, the government initiated and extended the “Build to Rent” program in 2013 and 2024. It involves building additional real estate by increasing the ratio of free properties by 45%.  

Slightly less than half of the apartments or premises of the property being built will go on free sale. The government has also decreed that at least a quarter of this amount should be sent to the market at reduced prices. The government encourages the developer with incentives and refunds of 10–20% of the property cost.

The second program is called “Renovate to Rent”. It encourages property owners to invest in renovating properties for rent. The government will subsidize 40% of the renovation costs.

The Cyprus Residency by Investment program enables successful applicants and their families to obtain a Cyprus immigration permit within two months with unlimited duration. Investors can apply for Cyprus citizenship after residing there for five years with such a permit.

Applicants can permanently reside in Cyprus by investing at least €300,000 in real estate or securities. Their annual income should be a minimum of €50,000. If the applicants invest in residential property, their income must come entirely from abroad. For other investment options, the applicant's income can be partially or entirely sourced from Cyprus.

Now, we will explore the biggest cities in Cyprus and the island's features. We will also try to determine the most profitable city of Cyprus for investing in real estate.

Limassol 

Limassol is the main artery of Cyprus' maritime traffic and the second-largest city in Сyprus. It includes the Old Port of Limassol, Limassol Marina, and the New Port of Limassol. The first two ports form the popular tourist area of Limassol Marina, where luxury housing and villas are located. 

The new port provides 80–90% of all tourist traffic to the island through cruise ships and ferries. Limassol is considered one of the best cities to live in Cyprus due to its combination of business activities, coastal resorts, and cultural heritage.

Advantages and features:

• Infrastructure and development. The city is known for its well-developed infrastructure, which includes modern business centers and municipal institutions. In recent years, high-end commercial real estate and luxury housing in Limassol have been actively developing.  
• Economic and business center. Thanks to the ports, most of the commodity traffic passes through Limassol. This has made the city the financial and commercial center of Cyprus, with significant commercial real estate investment in Limassol.  
• Cultural attractions. The city offers various cultural and recreational activities, from the Limassol marina to various festivals and events. Its proximity to the Troodos Mountains and beaches increases its appeal to tourists and residents alike.

The strengthening of its real estate market is due to tourism, international business, and a variety of Limassol real estate to invest in. This contributes to the continuous growth in property values and demand for city infrastructure improvements. The gross rental yield in Limassol as of Q2 2023 was 4.93%, the highest in Europe. 

The city is ideal for businessmen, expatriates, and investors looking to make a real estate investment in Cyprus and earn the highest rental income. It is also suitable for those seeking a vacation on the beaches of the Mediterranean with access to modern amenities and cultural activities.

Average real estate prices in Limassol:

Source: Numbeo 2024

Paphos 

According to legend, the goddess Aphrodite emerged from the sea foam on the coast of this very city. Paphos abounds with cultural attractions, which have restricted the development of the city and its infrastructure. Therefore, the city is divided into new and old parts. The new one is the center of life, business, and leisure, while the old one is the cultural heritage of the European nation and is included in the UNESCO World Heritage List. In 2017, the city was awarded the European Capital of Culture title.

Advantages and features:

• Rich cultural heritage. The city is home to many attractions and monuments, including the Paphos Archaeological Park and the Tombs of the Kings.
• Real estate market development. Cultural attractiveness contributes to the influx of real estate investment in Paphos and increased demand for market development in the tourism sector.  
• Commercial real estate prospects. The city has the second-largest Cyprus airport, which receives tourists and commercial cargo. This creates opportunities to invest in Paphos real estate, especially commercial ones.
• The leisurely pace of life. More relaxed and measured life than other cities, especially Nicosia and Limassol.

Paphos has a more developed tourism industry, which allows investors to earn rental income. The city also has the island's second-largest airport, attracting investment in commercial real estate. 

Paphos is ideal for retirees, families, and individuals seeking a peaceful and culturally rich environment. It is also attractive for investors interested in affordable real estate.

Average real estate prices in Paphos: 

Source: Numbeo 2024

Nicosia 

Nicosia is the last divided capital in the world. The dividing line between the northern and southern parts of the island runs through it. The so-called “Green Line” consists of abandoned buildings, walls, and fences with five checkpoints along its entire length. The main checkpoints are Ledra Street and Ledra Palace. The demand for residential property in Nicosia is lower than in the coastal parts of Cyprus due to the city's location in the island's center.

Advantages and features:

• Capital. Nicosia is the country's administrative and financial center. The infrastructure is better developed here, and the main educational institutions, such as the University of Cyprus and major business centers, are located here.
• Business center. Large international companies choose Cyprus and its capital as the location of their head office due to the island's convenient location between Europe and Asia.
• Pleasant prices. Property prices in Nicosia are not the highest in Cyprus, and the capital's real estate is in the medium-high price range.

The heart of the capital is the fortress of the Venetian period, also divided by the demarcation line. The Nicosia City Planning Department has initiated several programs to strengthen business activity in the fortress area.

The department offers grants for restoring abandoned real estate for further commercial activity. In addition, the government encourages the expansion and modernization of existing facilities and the relocation of economic activity in the fortress area. Thus, buying real estate in Nicosia can be profitable and fall under government programs.

Salaries are high compared to other cities. This makes Nicosia attractive to professional workers who want to live and work here. Expatriates and their families will find a stable economic environment and modern educational and medical facilities. The city's location in the island's interior makes it less attractive to tourists and more interesting for business and residential purposes.

Average real estate prices in Nicosia:

Source: Numbeo 2024

Larnaca 

Larnaca is the third-largest city in Cyprus and is only 40 kilometers from Nicosia. The airport and port make it the logistical center of the island, which handles up to 40% of Cyprus' total commodity flow. And the long coastline balances the industrial and logistical potential with the tourist attraction. Larnaca executives focused on the development of the city's tourism; 15 new hotel properties have been built, and 25 more are in the construction process.

Advantages and features:

• Diving. The 173-meter-long ship “Zenovia” sank near Larnaca in 1980, carrying a hundred pieces of various goods. It is now the most famous and popular diving site in Cyprus.
• Universal logistics hub. The city offers a combination of airport facilities in Paphos and ports in Limassol to invest in commercial and industrial real estate.
• Tourism development. Over the last decade, Larnaca has shifted its focus in favor of tourism development, making it a promising investment option.

The real estate market in Larnaca is unique in that primary properties are 34–36% cheaper than secondary ones. This rate is slightly modest in other cities, at 21–27%. There is potential to invest in secondary properties in Larnaca for subsequent renovation and sale or rental. Property sales in April 2024 alone have increased by 44% compared to 2023. At the same time, property prices in Larnaca are not proportionate to demand, resulting in an average annual price increase of only 7.7%.

The city's landscape is varied and includes an industrial area suitable for manufacturing companies and a residential area for the comfortable living of retirees or families. Young and active people will enjoy the coastal area of Finikoudes, where the promenade concentrates the city's main activities and hosts various festivals.

Average real estate prices in Larnaca: 

Source: Numbeo 2024

Ayia Napa 

Ayia Napa is a true resort town. The Foundation for Environmental Education (FEE) certifies about half of Ayia Napa's beaches with a “Blue Flag” award, given only to beaches whose water meets high quality, cleanliness, and safety standards. The rich nightlife and the Parko Paliatso amusement park, located right in the city's center. 

Advantages and features:

• A center of the nightlife. The city is famous for its wide range of entertainment for nightlife enthusiasts. Themed bars, cafés, clubs, and seasonal events attract tourists from all over the world. People from the other Cyprus cities come to Ayia Napa to enjoy the rich nightlife.
• Improving the tourism sector. The government is undertaking several programs to renovate beaches and improve their amenities. Real estate projects such as Ayia Napa Marina provide luxury apartments and villas in Ayia Napa for investment. 

Buying real estate in Ayia Napa for subsequent renting out is a good investment for those who are not afraid of fluctuations associated with the seasonality of the tourist sector. The city is developing a sector of elite commercial and residential real estate.

The city's main tourist community consists of young people looking for activities and entertainment and those more oriented to beach vacations. In the off-season, the temperature remains comfortable, and the flow of tourists lessens, making the stay pleasant for retirees and couples.   

Average real estate prices in Ayia Napa: 

Source: Numbeo 2024

So which city should you choose? 

To finally understand where the best place to buy property is in Сyprus, let's summarize the information on each city:

Limassol

The city boasts an excellent infrastructure, several Blue Flag beaches, and a high quality of life. However, housing prices in Limassol are much higher, and traffic congestion is possible. 

Paphos

Paphos is rich in historical heritage and cultural attractions. It offers a relaxed lifestyle, affordable real estate prices, and a high demand for rentals from tourists. The city has many UNESCO World Heritage sites.

Nicosia

Cyprus's capital is the administrative and business center of the island. Nicosia offers a stable economic environment, high-quality education, and medical facilities. However, there is no coastline, and the cost of living is higher than in other cities. Property prices are the second highest after Limassol.

Larnaca

Larnaca is known for its beautiful beaches and relaxed coastal lifestyle. The main international airport is located here, making it very accessible. The city offers affordable property prices and a growing demand for beach properties. 

Ayia Napa

A resort town with a vibrant nightlife and Blue Flag beaches. The city has a high seasonal demand for rental housing, and luxury real estate is developing.

So, Limassol is for work and leisure, Paphos is for cultural vacations and rentals, Nicosia is for business and family life, Larnaca is for coastal and affordable living, and Ayia Napa is for tourism-oriented investments.