Paphos Real Estate Market Overview & Forecast (2025 & 2026)

The Paphos real estate market in 2025 is attracting renewed interest from both lifestyle buyers and yield-focused investors. Known for its coastal scenery, Mediterranean lifestyle, and strong international buyer base, Paphos continues to perform as one of the most dynamic housing markets in Cyprus. While prices have risen steadily in recent years, demand remains high—especially for tourist-facing assets, rental-ready units, and properties eligible under Cyprus’s permanent residency program.

Paphos offers a hybrid value proposition: capital appreciation through coastal scarcity, and seasonal income from tourism-driven leasing. This dual-purpose appeal gives the Paphos Housing Market a competitive edge in the national investment landscape.

In 2024, transaction volumes in Paphos surpassed €400 million, driven by a mix of EU and non-EU investors targeting both newly built coastal villas and resale apartments in established districts. Property prices are now ranging between €2,500 and €3,500 per square meter depending on location, asset type, and view orientation.

Key micro-markets such as Coral Bay and Kato Paphos continue to outperform thanks to their high short-term rental turnover and resale liquidity.

While the post-pandemic surge has leveled out, Paphos remains one of the few cities in Cyprus offering consistent ROI through both holiday lettings and long-term leasing. With continued infrastructural upgrades and growing international interest, the 2025–2026 outlook is positive—especially for investors targeting mid- to high-end residential product with full rental compliance.

Overview of The Paphos Real Estate Market

The Paphos Real Estate Market in 2025 continues to demonstrate upward momentum, driven by sustained international interest, lifestyle migration, and the region’s expanding tourism economy. Residential activity remains concentrated along the coastline, where foreign capital fuels demand for both short-term rental assets and second homes.

Unlike some of Cyprus’s more regulated urban markets, Paphos offers relatively streamlined development opportunities and a wide range of new-build inventory.

The average residential price in Paphos currently ranges between €2,500 and €3,500 per square meter, depending on district, asset type, and build year.

In premium coastal areas such as Coral Bay, properties often exceed €4,000/sqm, while mid-range units in Peyia, Tombs of the Kings, and Geroskipou trade closer to €2,800/sqm. Detached villas, seafront apartments, and gated resort units continue to attract the highest price tags.

Transaction volumes have remained strong. In 2024, the city recorded approximately €430 million in real estate sales, with foreign nationals accounting for over 60% of all transactions. This reflects a healthy blend of Golden Visa-driven purchases, lifestyle buyers from Northern Europe, and investor groups targeting Airbnb-ready properties.

New development is active, particularly in Peyia and Geroskipou, where lower land prices support the construction of affordable detached homes and small residential complexes. That said, stricter coastal zoning laws introduced back in 2023 have begun to slow speculative development along the beachfront, preserving value in established zones such as Kato Paphos and Coral Bay.

• Average residential prices range from €2,500–€3,500/sqm, with premium zones exceeding €4,000/sqm.
• Foreign buyers drive over 60% of transactions, concentrated in tourist zones and villa developments.
• €430M in real estate volume recorded in 2024, reinforcing Paphos as a top-tier property market in Cyprus.
• Supply expanding in suburban areas like Peyia and Geroskipou, while coastal zones face tighter regulation.
• Demand remains strong for rental-ready, furnished units with tourism licensing or permanent residency eligibility.

In summary, the Paphos Housing Market offers sustained investor appeal through a combination of pricing upside, international liquidity, and dual-use functionality. With favorable entry points and rising tenant demand, 2025 represents a continued window of opportunity for capitalized investors seeking hybrid performance assets in Cyprus.

Neighborhood Analysis

The Paphos Housing Market is composed of distinct submarkets, each offering different value profiles for investors depending on location, property type, and rental potential. While coastal zones dominate for short-term rental and lifestyle buyers, inland and suburban districts continue to offer compelling price-to-yield ratios for long-term hold strategies.

Kato Paphos

Kato Paphos remains the city’s short-term rental hotspot. Located near the harbor, archaeological sites, and the coastal promenade, the area benefits from high tourist footfall and strong Airbnb performance.

The average property price in Kato Paphos is €3,200 per square meter, with modern 1- to 2-bedroom apartments selling between €220,000 and €350,000. Fully furnished, tourism-licensed units in this area yield between 6.5% and 8.5% annually during peak seasons.

Coral Bay

Coral Bay is Paphos’s premium beachfront district, known for its sandy beaches, upscale villas, and gated developments. It appeals to high-net-worth individuals, retirees, and investors targeting capital preservation with luxury rental capability.

Average prices exceed €3,800 per square meter, with standalone villas typically listed between €500,000 and €1.2 million. Properties here command the highest short-let rates in Paphos and maintain long-term liquidity.

Tombs of the Kings

This central corridor between Kato Paphos and Chloraka is popular for its walkability, public transport, and proximity to shops and attractions. The area sees high demand from both holidaymakers and year-round residents.

Properties average €3,000 per square meter, with 2-bedroom resale units trading between €200,000 and €300,000. Gross yields range from 6% to 7.5%, particularly in complexes with amenities such as pools and parking.

Neighborhood Median Prices and Price per Square Meter

Paphos Rental Market Overview

The Paphos rental market in 2025 remains one of Cyprus’s most dynamic, shaped by the city’s dual role as a top-tier tourist destination and a growing residential hub for retirees and expatriates. With strong demand for both short-term holiday lets and long-term furnished leases, Paphos offers investors the flexibility to pursue high-yield seasonal returns or stable year-round occupancy depending on location and asset type.

The average rent in Paphos is €1,300, as of Q1 2025.

The Paphos Housing Market continues to deliver compelling rental performance, with seasonality creating high peaks for tourism-focused assets and solid baseline demand sustaining year-round income in peripheral zones.

Average Monthly Rent by Property Type

• Studio / 1-Bedroom Apartment: €600–€800/month
  
  
• 2-Bedroom Apartment: €850–€1,200/month
  
  
• 3-Bedroom Villa: €1,800–€3,000/month
  
  
• Holiday Let Villas (Kato Paphos, Coral Bay – Peak Season): €1,800–€2,500/week
  

Short-term rental demand is highest in Kato Paphos, Coral Bay, and Tombs of the Kings—where licensed villas and seafront apartments achieve 90–95% occupancy during the April–October season. Fully furnished properties with pools, private parking, and sea views are especially competitive and often booked up to 12 months in advance.

Long-term rental demand is also on the rise, particularly in Geroskipou, Peyia, and Paphos Town, where affordability and amenities appeal to working professionals and full-time expats. Rental contracts in these areas typically range from 12 to 24 months, offering lower turnover and consistent income.

Yield Performance by Location

• Kato Paphos: 6.5%–8.5% gross annual yield (short-let focused)
  
  
• Tombs of the Kings: 6%–7.5% gross yield
  
  
• Geroskipou / Peyia: 5.5%–6.5% gross yield (long-term focused)
  
  
• Coral Bay: 4%–6% gross yield (higher capital exposure, peak rental upside)

Regulatory compliance is key for short-term lets. All holiday properties must hold a Tourism Accommodation License (EOT) and be registered with Cyprus’s VAT system. Investors must also account for cleaning, key management, and seasonal vacancy periods when estimating annual returns.

In summary, Paphos provides high-yield opportunities across both tourism and long-term residential segments. Investors equipped to navigate short-let licensing and property management logistics can capitalize on seasonal surges, while those seeking passive income will find solid performance in long-term leasing zones such as Geroskipou and Peyia.

Factors Influencing The Paphos Housing Market

The Paphos Housing Market in 2025 is shaped by a blend of economic, regulatory, and demographic forces. Its strong tourism infrastructure, high foreign investor participation, and consistent residency-based demand distinguish it from other regional markets. These six factors continue to drive both capital appreciation and rental performance.

1. Tourism-Led Housing Demand: Paphos remains one of Cyprus’s most visited destinations, with consistent growth in annual tourist arrivals. This tourism pressure drives seasonal rental demand, particularly for furnished apartments and villas in Kato Paphos, Coral Bay, and Tombs of the Kings. Properties in these zones maintain high short-let occupancy rates and strong per-night revenue, supporting yields as high as 8.5%.
   
   
2. Foreign Buyer Activity and Residency Incentives: More than 60% of all transactions in Paphos involve non-Cypriot nationals. Many of these investors purchase property to qualify for Cyprus’s permanent residency or tax residency programs, which require minimum investments ranging from €300,000 to €500,000. This creates structural demand for mid-to-high-end properties, particularly new builds in regulated zones.
   
   
3. Coastal Zoning and Development Restrictions: New development along the coastline has slowed due to tightened zoning regulations, which now limit vertical construction and density. While this caps oversupply, it also protects long-term value in key beachfront markets such as Coral Bay and Kato Paphos. The result is a more balanced supply-demand equation for investors seeking capital preservation.
   
   
4. Infrastructure Improvements and Connectivity: Ongoing road upgrades, new retail hubs, and planned hospital and education expansions are improving livability in outer districts such as Peyia and Geroskipou. These infrastructure improvements are pushing price growth beyond the city center and creating investment-grade suburban markets with strong long-term upside.
   
   
5. Currency Diversification and Capital Flight: With geopolitical uncertainty across Eastern Europe and parts of the Middle East, Paphos continues to benefit from safe-haven investment demand. Buyers from Israel, Lebanon, Ukraine, and the UK are using real estate as a hedge against currency risk and as a foothold within the EU.
   
   
6. Increasing Construction Costs: Construction costs in Paphos have risen by approximately 17% since 2022, due to inflation in labor, logistics, and imported materials. This impacts developer margins and leads to higher price points for new stock—creating additional upside for well-maintained resale inventory that offers location and rental potential without high build premiums.
   
   

Paphos Housing Market Forecast for 2026

The Paphos Housing Market is forecast to maintain its upward trajectory through 2026, albeit at a more moderated pace than the post-pandemic recovery period. Investor interest remains robust, driven by international residency programs, strong rental returns, and the city’s continued appeal as a lifestyle and tourism hub.

However, price growth is expected to stabilize as supply expands in non-coastal districts and foreign buyer demand adjusts to global financial conditions.

Residential prices are expected to rise by 3% to 5% across most of Paphos, with higher growth potential in emerging districts like Geroskipou, Peyia, and inland Paphos due to affordability and active development. Coastal areas like Kato Paphos and Coral Bay, already priced at a premium, may see more measured growth in the range of 2% to 3%, supported by tight supply and continued foreign demand.

The average price per square meter, currently €2,500–€3,500, is projected to climb toward €2,650–€3,700/sqm by year-end 2026. New-build, energy-efficient units are likely to command a growing share of transactions, especially those eligible under the Cyprus permanent residency scheme.

On the rental front, both short-term and long-term lease rates are forecast to increase by 4% to 6%, driven by inflation, seasonal demand, and supply constraints in high-occupancy tourist areas. Two-bedroom holiday apartments in Kato Paphos could command €1,300–€1,500/month on long-term contracts or €1,800–€2,200/week during peak season.

Investor interest is expected to remain strongest in the €250,000–€600,000 range, where return potential and resale liquidity are optimized. Properties with existing EOT licensing, sea views, or turnkey furnishing packages will remain the most liquid and highest-yielding across both lease strategies.

Is It Worth Buying a Property in Paphos?

Buying property in Paphos in 2025–2026 presents a range of strategic advantages for certain investor profiles, though it may not be suitable for all market participants. The city offers a competitive mix of affordability, tourism-led demand, and capital appreciation potential.

However, market performance is segmented, and returns can vary significantly by location, property type, and management model.

On the positive side, Paphos provides investors with access to relatively low-cost coastal properties compared to other European destinations. Entry-level pricing for modern, furnished apartments with rental potential begins around €250,000, and short-let yields in key zones such as Kato Paphos and Coral Bay can exceed 6.5%–8% annually.

The area’s dual appeal to both lifestyle buyers and seasonal tourists creates a versatile rental environment. Properties in licensed tourist districts experience strong seasonal occupancy, while long-term demand remains consistent in suburban areas such as Peyia and Geroskipou. For buyers prioritizing short-let returns or EU residency eligibility, Paphos offers practical alignment with those investment goals.

However, the market does come with limitations. Rental income in coastal areas is seasonal, and properties outside core tourist zones may underperform without local management or renovation. Licensing is required for short-term rentals, and operational oversight—especially for international owners—is essential. Additionally, appreciation may slow in oversupplied areas or for assets lacking modern features.

Liquidity is strongest in mid-market coastal assets with compliance in place. Overpriced villas or non-licensed short-let apartments may see delayed resale timelines. Investors seeking consistent passive income must also account for potential off-season gaps and rising operational expenses.

In summary, buying a property in Paphos is suitable for investors seeking a balance between rental yield and lifestyle value. While not without operational considerations, the market offers favorable conditions for buyers focused on licensed, tenant-ready assets in tourism-aligned districts with a clear long-term strategy.

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