The Rise of Holiday Homes: How Tourism Is Shaping Real Estate Demand in Cyprus
Cyprus has long enjoyed the kind of sun-kissed summers and mild winters that tempt visitors to linger. Lately, though, those visitors are doing more than lingering; many are buying. The growth of Cyprus real estate tied to tourism is no longer a side-note but a mainstream market force.
Record Visitor Numbers Drive Accommodation Needs
Tourist arrivals tell part of the story. In 2024 the island welcomed more than four million travellers, the highest tally on record and one that pushed tourism income beyond €3 billion.
Holiday Homes Outpace Hotels
All those extra suitcases need beds. Traditional hotels absorbed some demand, yet the big winners have been holiday homes. Analysts expect the number of properties available for short-term rental to climb by roughly 20 per cent by 2025, particularly around Paphos, Limassol and Larnaca. This brisk expansion has propelled interest—both domestic and foreign—in Cyprus real estate that can double as profitable, low-maintenance accommodation.
Read: Buying Property in Cyprus? Your Guide to Taxes as a Foreign Buyer
Rising Property Prices Reflect Market Confidence
Prices have followed the uptick in demand. After a five-year run of annual growth between 5 and 8 per cent, apartment and villa values still advanced a further 2.5 per cent in the second quarter of 2024, even as wider European markets cooled. Investors who once focused on beach-front villas are now weighing city apartments, renovated village houses and even mountain cabins, each offering a distinct rental niche and adding breadth to CY real estate investment opportunities.
Digital Nomads Add New Buyer Segment
A further catalyst arrived this spring. The government reopened its Digital Nomad Visa, letting non-EU professionals live on the island for up to two years while working remotely. Early applicants are already looking for studios with reliable fibre broadband and balconies facing the sea—proof that lifestyle migrants can underpin Cyprus property investment just as reliably as fortnight holidaymakers.
Stricter Regulations Shape Hosting Landscape
Underlying these headline trends is a tightening regulatory framework. Since 2020, any self-catering accommodation offered through platforms such as Airbnb must be registered with the Deputy Ministry of Tourism, and licences are now being renewed under more stringent health-and-safety checks. Compliance has nudged some casual hosts to appoint professional managers, strengthening the role of Cyprus real estate agents who can handle paperwork, tax filings and guest screening.
Real Estate Agencies Bridge the Gap for Foreign Buyers
For buyers based abroad, partnering with a reputable Cyprus real estate agency offers two practical advantages: on-the-ground knowledge of neighbourhood yields and guidance through a conveyancing system that differs from most Northern-European models. Agencies also maintain standing relationships with surveyors and lawyers, streamlining transactions that might otherwise stall under local bureaucracy.
Development Keeps Pace—For Now
Looking ahead, construction data suggest that supply will keep chasing demand. New residential projects are forecast to grow by about 10 per cent a year until 2025, with many developers designing units specifically for the holiday-let or hybrid use segment. Still, land near the most popular beaches remains finite, hinting that well-located stock will hold its value even as fresh schemes break ground inland.
Sustained Momentum Depends on External Factors
Will the momentum on Cyprus real estate investment last? Much depends on aviation links, household incomes in Cyprus’s key tourist feeder markets and the evolution of EU-wide rules on short-term rentals. For now, occupancy rates remain healthy, mortgage rates are settled below many continental peers and online booking platforms keep Cyprus in front of millions of potential guests. Against that backdrop, holiday homes look set to move from peripheral investment to central pillar in the island’s property landscape—an evolution that keen observers of the market should watch as closely as they watch the waves along the coastline.
