Lyra Amvrosidou, Executive Director of Property Gallery Developers & Constructors Ltd, offers valuable insights into the evolving real estate landscape in Cyprus, highlighting areas of resilience, upcoming growth sectors, and the importance of supportive government policies.
Positive Momentum Expected Through 2026
Looking ahead to the next 12–18 months, Amvrosidou maintains a confident outlook for the Cypriot real estate sector. Both local and foreign interest remains strong, fueled by lifestyle migration, the relocation of tech companies, and sustained appetite for secondary residences.
She anticipates continued growth in residential real estate—particularly in the high-end and upper mid-market brackets. Premium-branded developments, like YOO Limassol, which her firm is delivering in collaboration with designer Philippe Starck, are positioned to meet this demand. This project combines seafront living with five-star amenities, wellness features, and full freehold ownership—key selling points for global investors prioritizing legal security.
In addition to residential projects, Amvrosidou points to rising demand in the commercial space. Class A office properties are in short supply, especially in Limassol. To meet this demand, Property Gallery currently has five new business centres underway, most of which were sold even before construction began.
Challenges: Rising Costs, Bureaucracy, and Overdependence on Foreign Capital
Despite its demonstrated resilience, the sector isn’t without challenges. According to Amvrosidou, the most pressing concern is the rising cost of construction. While international supply chains have somewhat stabilised, local material and labour costs remain elevated. This squeezes developers’ profit margins and ultimately results in higher property prices—especially in the mid-market segment.
Another obstacle is administrative inefficiency. Licensing delays continue to stall projects, inflate development costs, and frustrate both developers and investors. Although some improvements have been made, bureaucratic hurdles remain a sticking point.
A third issue is the heavy reliance on foreign investment. While this has supported the high-end market, it also exposes the sector to geopolitical and global economic fluctuations. Amvrosidou stresses the importance of market diversification to safeguard long-term stability.
Cyprus’ Unique Competitive Edge—and Limitations
Compared to other Mediterranean destinations, Amvrosidou believes Cyprus stands out. The country offers a rare combination of strategic geographic location, EU membership, and a legal system based on British common law. Investors also benefit from a low corporate tax rate and an English-speaking environment.
Beyond its coastline, Cyprus offers a lifestyle and climate that appeals to families and professionals alike. The success of Property Gallery’s Petit Palais Hotel in the Troodos Mountains illustrates the growing appeal of inland locations. A second hospitality project, Pendeli Resort in Platres, is already in development, catering to upscale clientele seeking alternatives to coastal destinations.
However, Amvrosidou acknowledges that Cyprus’ small size can be a drawback. It limits market liquidity and may not appeal to very large institutional investors. Bureaucratic inefficiencies further constrain growth, despite recent reform efforts.
Institutional Capital Elevating Market Standards
The entry of institutional investors, including private equity funds and family offices, is transforming the sector. These investors bring a global perspective, demanding higher design standards, better project execution, and greater transparency. This shift is helping elevate the quality and professionalism of the Cypriot property market.
Tailored investment solutions—especially popular with family offices—are encouraging developers to offer more diverse and sophisticated products. According to Amvrosidou, this evolution is moving the industry away from generic developments toward projects that better align with international best practices.
Local Government Reform: Promising, But Still in Progress
Amvrosidou supports the ongoing decentralisation of local government, calling it a necessary step forward. While positive changes are underway, she notes that delays still persist, particularly in digitising services and clearing past backlogs.
The true impact of policies like build-to-rent is yet to be fully felt. Amvrosidou estimates it will take another three to five years for these initiatives to show their full potential, once the relevant projects are complete and operational.
To ensure effective implementation, she calls for increased staffing and proper training in key departments, which would accelerate approvals and improve efficiency across the board.
Policy Support is Driving Demand and Innovation
Amvrosidou believes government policy continues to shape real estate trends in meaningful ways. Measures such as tax breaks for international buyers, streamlined property and VAT procedures, and residency programmes are encouraging both local and foreign investment.
The possible inclusion of Cyprus in the Schengen Zone has also piqued interest among non-EU nationals. Meanwhile, sustainability initiatives and green building regulations—though initially costly—are steering the sector toward more energy-efficient, future-proof developments.
The emerging build-to-rent model, aimed at serving younger residents and digital nomads, is helping to expand housing supply and stabilise rental prices. At the same time, improvements in land registration and the permitting process—driven by digital transformation—are making Cyprus more appealing to institutional investors.
Source: www.cbn.com.cy
