Rental property investments in Cyprus are yielding significantly higher returns than bank deposits. Rental yields range between 4% and 6%, in stark contrast to the average one-year household bank deposit rate of 1.98% in October.
According to property consultancy Danos International, Limassol leads in rental growth, with yields also ranging from 4% to 6%. Seafront apartments and properties in high-demand neighbourhoods are particularly lucrative, attracting both local and international tenants.
Rental yields
In the capital, Nicosia, rental yields remain steady at 4% to 5%, particularly in areas close to business districts, government offices, and universities. This stability reflects the city’s role as a hub for commerce and culture.
Larnaca has gained traction as an investment hotspot, offering yields of 5% to 6%. Properties near the airport or beaches are especially profitable, appealing to investors seeking well-priced assets with strong rental demand.
In Paphos, popular with British retirees and tourists, long-term rentals yield 4% to 5%, with the potential for even higher returns from short-term holiday lets.
Property prices in Cyprus have stabilised for the first time since 2020, with minimal fluctuations over the past two quarters. This marks a shift from the consistent growth observed since 2021, when quarterly apartment prices rose by 1% to 5%.
The average price/sq.m for residential properties has increased from €1,800 in 2022 to €2,500 in 2024. E.g. a 150 sq.m house costing €270,000 in 2022 is now valued at €375,000, while a 100 sq.m apartment priced at €110,000 in 2022 has risen to €160,000.
Rental prices in Limassol start from approximately €850/month for a one-bedroom flat, €1,300 for a two-bedroom unit, and around €1,700 for three bedrooms; rates that many Cypriot residents find challenging to afford.
Rental yields are calculated by comparing annual rental income to the property’s purchase price. Some property owners are achieving even higher returns through short-term rentals via platforms like Airbnb, further enhancing their investment potential.