Companies operating in the third-party real estate industry have had to navigate numerous economic headwinds in recent years, notably rising interest rates, spiralling inflation and muted economic growth. Revenue is projected to sink at a compound annual rate of 0.6% over the five years through 2025, including an estimated jump of 1.2% in 2025 to €207.6 billion, while the average industry profit margin is forecast to reach 35.1%. Amid spiralling inflation, central banks across Europe ratcheted up interest rates, resulting in borrowing costs skyrocketing over the two years through 2023. In residential markets, elevated mortgage rates combined with tightening credit conditions eventually ate into demand, inciting a drop in house prices. Rental markets performed well when house prices were elevated (2021-2023), being the cheaper alternative for cash-strapped buyers. However, even lessors felt the pinch of rising mortgage rates, forcing them to hoist rent prices to cover costs and pricing out potential buyers. This led to a slowdown in rental markets in 2023, weighing on revenue growth. However, this has started to turn around in 2025 as interest rates have been falling across Europe in the two years through 2025, reducing borrowing costs for buyers and boosting property transactions. This has helped revenue to rebound slightly in 2025 as estate agents earn commission from property transactions. Revenue is forecast to swell at a compound annual rate of 3.7% over the five years through 2030 to €249.5 billion. Housing prices are recovering in 2025 as fixed-rate mortgages begin to drop and economic uncertainty subsides, aiding revenue growth in the short term. Over the coming years, PropTech—technology-driven innovations designed to improve and streamline the real estate industry—will force estate agents to adapt, shaking up the traditional real estate sector. A notable application of PropTech is the use of AI and data analytics to predict a home’s future value and speed up the process of retrofitting properties to become more sustainable.

Housing Index in Cyprus increased to 113.71 points in the first quarter of 2025 from 112.47 points in the fourth quarter of 2024. This dataset provides - Cyprus House Price Index - actual values, historical data, forecast, chart, statistics, economic calendar and news.

The Direct Real Estate Activities industry have come up against numerous headwinds in recent years, ranging from the COVID-19 outbreak in 2020 to the high base rate environment in the years since, which has inflated borrowing costs for potential buyers. This is a sharp contrast to the ultra-low interest environment seen over the decade following the 2008 financial crisis. Still, revenue is forecast to edge upwards at a compound annual rate of 0.6% over the five years through 2025 to €622.9 billion, including an anticipated rise of 0.8% in 2025. Despite weak revenue growth, profitability remains strong, with the average industry profit margin standing at an estimated 18.9% in 2025. Central banks across Europe adopted aggressive monetary policy in the two years through 2023 in an effort to curb spiralling inflation. This ratcheted up borrowing costs and hit the real estate sector. In the residential property market, mortgage rates picked up and hit housing transaction levels. However, the level of mortgage rate hikes has varied across Europe, with the UK experiencing the largest rise, meaning the dent to UK real estate demand was more pronounced. Commercial real estate has also struggled due to inflationary pressures, supply chain disruptions and rising rates. Alongside this, the market’s stock of office space isn’t able to satisfy business demand, with companies placing a greater emphasis on high-quality space and environmental impact. Properties in many areas haven't been suitable due to their lack of green credentials. Nevertheless, things are looking up, as interest rates have been falling across Europe over the two years through 2025, reducing borrowing costs and boosting the number of property transactions, which is aiding revenue growth for estate agents. Revenue is slated to grow at a compound annual rate of 4.5% over the five years through 2030 to €777.6 billion. Economic conditions are set to improve in the short term, which will boost consumer and business confidence, ramping up the number of property transactions in both the residential and commercial real estate markets. However, estate agents may look to adjust their offerings to align with the data centre boom to soak up the demand from this market, while also adhering to sustainability commitments.

Key information about House Prices Growth

• Cyprus house prices grew 6.5% YoY in Sep 2024, following an increase of 8.0% YoY in the previous quarter.
• YoY growth data is updated quarterly, available from Mar 2007 to Sep 2024, with an average growth rate of 0.9%.
• House price data reached an all-time high of 25.3% in Sep 2007 and a record low of -9.4% in Mar 2014.

Graph and download economic data for Residential Property Prices for Cyprus (QCYN628BIS) from Q1 2002 to Q1 2025 about Cyprus, residential, HPI, housing, price index, indexes, and price.

Building contractors and developers depend on various socio-economic factors, including property values, underlying sentiment in the housing market, the degree of optimism among downstream businesses and credit conditions. All of these drivers typically track in line with economic sentiment, with recent economic shocks spurring a difficult period for building contractors and developers. Nonetheless, the enduring need for building services, particularly to tackle housing shortages across the continent, ensures a strong foundation of work. Revenue is forecast to grow at a compound annual rate of 2.3% to reach €1.3 trillion over the five years through 2025. Operational and supply chain disruption caused by the pandemic reversed the fortunes of building contractors and developers in 2020, as on-site activity tumbled and downstream clients either cancelled, froze or scaled back investment plans. Aided by the release of pent-up demand and supportive government policy, building construction output rebounded in 2021. Excess demand for key raw materials led to extended lead times during this period, while input costs recorded a further surge as a result of the effects of rapidly climbing energy prices following Russia’s invasion of Ukraine. Soaring construction costs and the impact of interest rate hikes on both the housing market and investor sentiment led to a renewed slowdown in building construction activity across the continent. However, falling inflation and the start of an interest rate cutting cycle have spurred signs of a recovery in new work volumes, supporting anticipated revenue growth of 2.3% in 2025. Revenue is forecast to increase at a compound annual rate of 6.7% to €1.7 trillion over the five years through 2030. Activity is set to remain sluggish in the medium term, as weak economic growth and uncertainty surrounding the impact of the volatile global tariff environment on inflation and borrowing costs continue to weigh on investor sentiment. Contractors and developers will increasingly rely on public sector support, including measures to boost the supply of new housing, as countries seek to tackle severe housing shortages. Meanwhile, the introduction of more stringent sustainability requirements will drive demand for energy retrofits.

The Cyprus ICT market is expected to grow from USD 0.89 million in 2025 to USD 1.15 million by 2033, at a CAGR of 2.29% during the forecast period. The market growth can be attributed to the increasing adoption of digital technologies by businesses and consumers, along with government initiatives to promote ICT development. However, factors such as the small domestic market size and the reliance on imported ICT products and services could pose challenges to the market's growth. Key drivers of market growth include the rising demand for cloud computing services, the proliferation of mobile devices, and the adoption of artificial intelligence and machine learning technologies. The increasing focus on digital transformation by businesses and governments is also expected to drive demand for ICT solutions. Moreover, the presence of a skilled IT workforce and a supportive regulatory environment are expected to provide growth opportunities for the market. Recent developments include: June 2024: Placy, an innovative AI assistant, is introduced in Cyprus to revolutionize its real estate landscape. The primary aim is to streamline the intricate real estate processes, providing professionals and clients with enhanced efficiency and deeper insights., March 2024: Cyprus, in a strategic move, has signed an Enterprise Agreement with tech giant Microsoft. The strategic agreement, valued at EUR 8 million, was sealed by the Deputy Ministry of Research, Innovation, and Digital Policy on behalf of the government. This agreement not only entails the allocation of 10,000 Microsoft 365 software licenses but also includes a suite of advanced tools designed to enhance the island's digital landscape and bolster the operational efficiency of its public sector.. Key drivers for this market are: Implementation of 5G is Back on Track, Growing demand for Cloud Technology. Potential restraints include: Implementation of 5G is Back on Track, Growing demand for Cloud Technology. Notable trends are: Growing demand for Cloud Technology.

The Cyprus ICT market, valued at approximately $0.89 billion in 2025, is projected to experience steady growth, driven by increasing government investments in digital infrastructure, rising adoption of cloud computing and big data analytics across various sectors, and the burgeoning e-commerce landscape. The 2.29% CAGR indicates a consistent, albeit moderate, expansion over the forecast period (2025-2033). Key growth drivers include the BFSI sector's ongoing digital transformation, the expanding needs of the IT and Telecom industry itself, and the government's initiatives to modernize public services through technology. The market segmentation reveals that the Software and Services segments are likely to dominate, given the increasing demand for sophisticated software solutions and specialized IT services across all enterprise sizes and industry verticals. While the hardware segment will contribute significantly, its growth may be relatively slower compared to software and services due to the nature of hardware lifecycles and the shift towards cloud-based solutions. Small and Medium Enterprises (SMEs) represent a substantial market segment, presenting significant opportunities for ICT providers specializing in affordable and scalable solutions. However, challenges such as limited skilled workforce and potential cybersecurity risks could act as restraints to market growth. The forecast for 2033 suggests a market size exceeding $1.1 billion, reflecting the cumulative effect of consistent growth. The strong presence of multinational technology corporations like Microsoft, IBM, and Oracle in Cyprus underscores the country's strategic importance within the broader regional ICT landscape. Furthermore, the involvement of local players like AlleoTech and COMIT Solutions indicates a thriving local ecosystem, contributing to the overall market dynamism. While the "Other Industry Verticals" segment warrants closer analysis, it is expected to see growth driven by the increasing digitalization across diverse sectors, mirroring broader global trends in ICT adoption. To maintain competitiveness, Cypriot ICT companies will need to focus on innovation, strategic partnerships, and developing a skilled workforce capable of handling emerging technologies. Recent developments include: June 2024: Placy, an innovative AI assistant, is introduced in Cyprus to revolutionize its real estate landscape. The primary aim is to streamline the intricate real estate processes, providing professionals and clients with enhanced efficiency and deeper insights., March 2024: Cyprus, in a strategic move, has signed an Enterprise Agreement with tech giant Microsoft. The strategic agreement, valued at EUR 8 million, was sealed by the Deputy Ministry of Research, Innovation, and Digital Policy on behalf of the government. This agreement not only entails the allocation of 10,000 Microsoft 365 software licenses but also includes a suite of advanced tools designed to enhance the island's digital landscape and bolster the operational efficiency of its public sector.. Key drivers for this market are: Implementation of 5G is Back on Track, Growing demand for Cloud Technology. Potential restraints include: Implementation of 5G is Back on Track, Growing demand for Cloud Technology. Notable trends are: Growing demand for Cloud Technology.