I look at the latest RICS and KPMG Cyprus report for Q2 2026, and the numbers are striking: apartment values in Larnaca rose by 5.59% in a single quarter, outpacing every other major city in Cyprus. I explain why Larnaca is attracting buyers who can no longer afford Limassol, and what is driving this momentum. But I also want to be honest with you: rising prices create additional risk for new buyers, and not every property in a popular city is a good investment. I walk you through the three things you need to examine before buying, including location, tenant strategy, and how to calculate your real net return after all expenses.
On August 25, 2026, RICS and KPMG Cyprus published a new report on the Cypriot property market during the second quarter of 2026. The report covers five major markets in the Republic of Cyprus: Larnaca, Limassol, Paphos, Nicosia, and the Famagusta region. The data is clear: Larnaca grew faster than every other city during that quarter.
Between the first and second quarters of 2026, apartment values in Larnaca increased by 5.59%. House values in Larnaca increased by 4.48%. These are quarterly figures, meaning these changes happened over three months.
Comparing Larnaca with the other cities for apartments:
For houses, the ranking looked like this:
These figures reflect the general direction of the market, measured through reference properties in different parts of each city. They do not mean every individual property increased by exactly that amount. But the overall trend is significant: Larnaca was the strongest market in Cyprus for both apartments and houses during that period.
One likely reason is that Limassol has become expensive. For years, international investors focused on Limassol because of its international companies, large expatriate population, and coastal location. That demand pushed prices up considerably. Some buyers are now looking for a more affordable alternative.
Larnaca offers several advantages:
For some buyers, Larnaca now represents a genuine alternative to Limassol.
If you already own property in Larnaca, increasing values are positive. But for a new buyer, they also introduce additional risk. When a city gains attention, some sellers and developers use that momentum to raise their asking prices. Buying simply because a city is popular is not a strategy.
A difference of a few streets can completely change the potential of a property. You need to assess the distance from the sea, shops, schools, and main roads, as well as the areas where tenants actually want to live.
Your investment strategy depends on the type of tenant you want to attract. Long-term rentals targeting local residents, employees, or expatriates require a practical area suited to everyday life. Short-term rentals require proximity to the beach, easy access to the airport, and strong tourism demand. These two strategies point toward different areas and different types of property.
The RICS and KPMG report shows that apartment rents increased by 7.36% across Cyprus over one year, with an estimated average gross yield of approximately 5.51%. But gross yield is not what you actually keep.
Consider a simple example. You buy an apartment for 200,000 euros and receive 11,000 euros in annual rent. That gives you a gross yield of 5.5%. But if you spend 3,000 euros during the year on management, maintenance, charges, and vacancy periods, you are left with 8,000 euros before tax. Your real return drops to 4%.
You should never rely only on the yield figure presented by a seller or developer. Build your own calculation and include a realistic estimate of every expense. Also compare asking prices with similar properties in the same area, and look for data on prices that were actually paid, not just listed.
Before signing anything in Cyprus, verify the title deed, building permits, any charges on the property, and its overall legal compliance.
The second quarter 2026 data shows that Larnaca has strong momentum. It outperformed every other major market in Cyprus covered by the RICS and KPMG report. But this does not make every property a good investment.
The right question is not whether to invest in Larnaca. The right question is which apartment, in which area, at what price, and for which type of tenant. Those details determine whether an investment makes sense.
Apartment values in Larnaca increased by 5.59% and house values increased by 4.48% between the first and second quarters of 2026. These are quarterly figures, meaning these changes occurred over just three months, making Larnaca the strongest performing market in Cyprus for both property types.
One key reason is that property prices in Limassol have already risen significantly due to years of international investor interest, pushing some buyers to look for more affordable coastal alternatives. Larnaca offers several attractive features including the main international airport, a seaside location, and several new development projects that are increasing interest in the city.
The RICS and KPMG report estimates an average gross yield of approximately 5.51% for apartments across Cyprus, with rents increasing by 7.36% over one year. However, once you deduct management fees, maintenance, insurance, periods without a tenant, and taxes, your actual return can be significantly lower, as illustrated by an example in the episode where a 5.5% gross yield fell to 4% after expenses.
Buyers should carefully evaluate the exact location of the property, since even a few streets can make a significant difference in its potential. They also need to decide what type of tenant they want to attract, as long-term and short-term rental strategies require different areas and property types, and they must calculate the true net return after all expenses rather than relying on figures provided by sellers or developers.
Before signing anything, buyers should verify the title deed, building permits, any possible charges, and the overall legal compliance of the property. This due diligence is essential in Cyprus to avoid potential legal complications after the purchase.