Cyprus property investors are enjoying better returns from rental income than bank deposits, with yields of up to 6 per cent far outpacing the modest 1.98 per cent average return on household deposits, according to October data.
Investors in cities like Limassol are benefiting from particularly high returns, with rental yields on apartments ranging from 4 per cent to 6 per cent. According to Danos International Property Consultants and Valuers, seaside properties and those in sought-after neighbourhoods are especially lucrative.
“Limassol, the city with the highest rental growth in recent months, offers rental yields for apartments between 4 per cent and 6 per cent.
These yields are particularly lucrative for seaside apartments and properties in popular neighbourhoods with high demand from foreigners and locals,” the agency reported.
Nicosia offers stable yields of 4 per cent to 5 per cent, thanks to strong demand near business centres, universities, and government offices. “These yields reflect the city’s importance as a commercial and cultural centre, where demand for rental properties from professionals and students remains high,” the report noted.
Meanwhile, Larnaca has emerged as a hotspot for property investors, with yields of 5 per cent to 6 per cent. The city’s combination of affordability and appeal to local and international buyers makes it particularly attractive. Properties close to the airport or beaches deliver the highest returns.
“Paphos, known for its attractiveness to British retirees and tourists, also offers favourable yields, particularly for holiday homes,” the consultants underlined.
For long-term rentals, yields range from 4 per cent to 5 per cent, while short-term holiday lets during the tourist season can generate even higher returns.
To calculate rental yields, the annual rent—monthly rent multiplied by 12—is divided by the purchase price. Platforms like Airbnb have further enhanced income potential, offering higher yields for short-term rentals.
“The demand for apartments from locals and investors continues to be the driving force of the property market in Cyprus, as yields remain competitive, with prices stabilising,” Danos Property Consultants noted.
For the first time since 2020, property prices have stabilised, with only minor fluctuations over the past two quarters.
This is a marked change from the steady increases of 1 per cent to 5 per cent per quarter recorded since 2021.
The stabilisation is reflected in rising rental prices across Cyprus. Limassol leads the way, with one-bedroom apartments renting from €850, two-bedroom units from €1,300, and three-bedroom apartments reaching €1,700—a level making affordability a challenge for many locals.
Despite rising property prices—up from €1,800 per square metre in 2022 to €2,500 in 2024—investors remain undeterred.
A 150-square-metre home that cost €270,000 in 2022 now commands €375,000, while a 100-square-metre apartment that sold for €110,000 two years ago now costs €160,000.
