Nicosia is rapidly emerging as Cyprus’ most dynamic construction market, with development activity in the capital accelerating at a notable pace. Long overshadowed by coastal cities, it is now gaining ground as a key growth centre, driven by a surge in new projects and a renewed focus on residential supply, according to PwC’s Cyprus Real Estate Market – Year in Review 2025 report.
- +45% YoY increase in licensed building surface area
- 6,490 building permits issued (Jan-Oct 2025) vs 5,955 in 2024
- €3.2b total value of permits (up from €2.5b)
- 34% share of total licensed development surface (jointly with Limassol)
- 84% of new developments are residential
At the basis of this shift is the 45% year-on-year increase in licensed building surface area during the first ten months of 2025, the highest growth rate recorded among all districts, according to PwC. Across Cyprus, a total of 6,490 building permits were issued between January and October 2025, up from 5,955 in the same period of 2024, while the value of these permits rose sharply to €3.2b from €2.5b. This substantial rise reflects a strong increase in development activity and signals growing confidence in the capital’s real estate market.
Nicosia’s importance is further underlined by its share of national construction activity. Together with Limassol, the city accounts for 34% of total licensed development surface area in Cyprus, the PwC report notes, positioning it firmly as a central hub for new projects. This marks a notable evolution for a market that has historically played a secondary role to coastal investment hotspots.
The report’s findings suggest that Nicosia’s recent momentum is closely linked to the broader expansion in residential development across the island. With 84% of new licensed developments concentrated in the residential sector, the capital is benefiting from sustained housing demand and increasing development activity in urban areas.
While Nicosia recorded the strongest growth, other districts also saw increases in construction activity, though at a slower pace. Limassol, for instance, posted a 35% rise in licensed surface area, while Larnaca accounted for 19% of total licensed development surface. In contrast, Famagusta was the only district to record a decline, with a 15% drop in licensed surface area, which the report attributes to the rapid expansion in activity observed in the previous year, effectively creating a higher base for comparison.
Read the complete report here.
