Rental property investments in Cyprus are generating significantly higher returns than bank deposits, with rental yields ranging from 4 to 6 per cent compared to the average bank deposit rate of 1.98 per cent for one-year household deposits, according to October data.
Property consultancy Danos International reports that Limassol, which has seen the highest rent increases in recent months, offers rental yields between 4 and 6 per cent. These returns are particularly attractive for seafront apartments and properties in popular neighbourhoods that appeal to both foreign and local tenants.
The capital, Nicosia, maintains stable rental yields of 4 to 5 per cent, particularly in areas near business districts, government offices and universities, reflecting its importance as a commercial and cultural centre.
Larnaca has emerged as a popular investment destination, offering yields of 5 to 6 per cent. Properties near the airport or beaches tend to generate the highest returns, making it an attractive option for investors seeking well-priced properties with strong rental potential.
Paphos, known for its appeal to British retirees and tourists, offers yields of 4 to 5 per cent for long-term rentals, with potential for higher returns from short-term holiday lets.
Property prices have stabilised for the first time since 2020, showing minimal fluctuations over two consecutive quarters with increases just above 0 per cent. This marks a departure from the upward trend observed since 2021, when apartments recorded quarterly increases of 1 to 5 per cent.
The average price per square metre for residential properties has risen from €1,800 in 2022 to €2,500 in 2024. A 150-square-metre house that cost €270,000 in 2022 now requires €375,000, while a 100-square-metre apartment previously priced at €110,000 now costs €160,000.
Current rental rates in Limassol start from €850 monthly for one-bedroom flats, €1,300 for two bedrooms, and approximately €1,700 for three bedrooms, levels that are challenging for many Cypriot residents to afford.
Rental yield calculations are based on the relationship between annual rental income and purchase price, with some property owners achieving even higher returns through short-term lettings via platforms such as Airbnb.
