Larnaca: Cyprus’ New Investment Hotspot?

Larnaca, the third-largest city in Cyprus, is rapidly emerging as one of the island’s most attractive investment destinations. With major infrastructure upgrades, affordable real estate prices, and rising international demand, the city is increasingly drawing interest from investors from UK, Israel, Europe, Australia, and the US. Interest in Cyprus as a whole continues to grow, and here are four key reasons why Cyprus stands out as a smart investment choice:

Why Larnaca Makes Investment Sense

1. Attractive Entry Prices with Strong Growth Potential

According to Cyprus Sotheby’s International Realty’s H1 2025 report, Larnaca recorded 823 residential transactions, with 23% (192 properties) in the mid-to-high segment (apartments above €200,000 and houses above €500,000). Between Q1 2024 and Q1 2025, prices in this segment grew by 10.2% — a clear indicator of rising demand for quality urban living. Yet, prices in Larnaca still remain more competitive than in Limassol or Paphos, offering strong upside potential. Explore the latest data in our Insights Report

2. Major Infrastructure Projects Driving Demand

Larnaca is undergoing significant transformation through multi-million-euro investments. These include the redevelopment of the Finikoudes seafront, a large-scale port and marina upgrade, and major transport improvements — all contributing to higher property values.

Liza Kucere, Area Manager for Larnaca at Cyprus Sotheby’s International Realty, highlights several key developments:
Salina Park, with a lake, fountains, and sports areas, opened recently as a major public space. The government allocated over €22 million for upgrades including new bike lanes, modernized roads, and street lighting.

A new campus for the Cyprus University of Technology is being built in Mackenzie. Scheduled for completion by summer 2027 with a €16.4 million budget (supported by the EU), the faculty will focus on marine sciences and is expected to host 1,500–2,000 students.

Liza Kucere also notes that Larnaca already has two major universities:

• UCLan Cyprus, opened in 2012, is a branch of the UK’s University of Central Lancashire and offers degrees accredited in both the UK and Cyprus.
• American University of Cyprus, which opened in 2021.

Two more important places in the city, in my opinion, are the Olympic 50-meter swimming pool, which hosts the annual Pancyprian Championship, and Larnaca International Airport, where a new terminal is currently under active construction.

3. Strategic Location & Transport Connectivity

Larnaca International Airport operates around 100 flights daily, connecting Cyprus with key cities across Europe, the Middle East, and Asia — making the city highly accessible for both business and leisure. Its location near major highways ensures easy travel across the island.

4. Tourism: A Key Growth Driver

Larnaca welcomed around 350,000 tourists in Q1 2025 — a 12% increase year-on-year (Ministry of Tourism data). This consistent influx supports strong rental demand, making property investment highly lucrative.
The city boasts several Blue Flag beaches, such as Mackenzie and Finikoudes, known for their cleanliness and safety. These are highly appealing to both tourists and expats. Just a short drive away in Ayia Napa lies Nissi Beach, named

Europe’s top beach in the 2024 European Beach Index.

For investors, these sought-after coastal locations translate into stable demand and increasing property values.
Key Investment Hotspots in Larnaca

• Mackenzie – a premium beachfront district with lively restaurants and bars, ideal for short-term rentals. The beach is famous for its dramatic views of planes landing and taking off against the backdrop of the sea — a must-visit for tourists.
• Faneromeni / Drosia – well-developed residential areas popular with families and expats due to proximity to schools and the city center.
• Livadia – a fast-growing suburb with new residential developments, appealing to early-stage buyers thanks to competitive pricing and capital appreciation potential.
• Dhekelia Road – a long coastal strip with upscale hotels and residential projects, known for strong capital gain opportunities.
• Larnaca Marina & City Center – undergoing a massive port and marina redevelopment, attracting global capital and offering a mix of commercial and residential properties.
• Pervolia – a quiet seaside village just 10 minutes from the airport, known for its sandy Faros Beach (Blue Flag), lighthouse, and Venetian tower — the tourists’ favorite.
• Aradippou — оne of the highest municipalities in Larnaca district, located in the northwest of the city. The area actively protects interests, especially in the residential and commercial segments. Popular with local families and relocators due to its proximity to the airport and major highways. An excellent choice for those considering a property for their own residence or long-term rent.

Investment Formats

• Short-Term Rentals: Strong tourist demand delivers consistent returns.
• Off-Plan Purchases: Early entry prices and long-term growth potential.
• Commercial Property: Shops and offices near residential growth areas offer solid ROI.
• Permanent Relocation: Purchasing property as a route to Cyprus residency.

Investment Appeal at a Glance

• Rental Yields: 5–8% for apartments, up to 8–9% for commercial units.
• Capital Growth: Apartment prices rose by 3.1% in 2024, averaging €196,600.
• Infrastructure: Projects like the new marina are transforming the city’s investment landscape.

What to Invest In

• Apartments are a favorite among investors, with entry-level new builds starting from €150,000. Coastal areas, such as Mackenzie, are especially popular. Rental yields average 5–6% annually, reaching up to 8% in Mackenzie.
• Houses & Villas. For those seeking space and privacy, options include 3-bedroom maisonettes in Livadia from €295,000 (€2,300/m²), or villas in Oroklini, Dhekelia, and Pervolia, priced between €320,000 and €1 million.
• Commercial Property. Office and retail demand is rising alongside residential growth. Prime locations offer 8–9% rental yields but require in-depth market knowledge.

Off-Plan vs Resale (Cyprus, Larnaca)

Off-plan properties in Larnaca can be 10–20% cheaper than completed homes. For example, new projects in Livadia start at €2,300/m² — well below finished property prices. Buyers also benefit from flexible payment plans and better unit selection. However, off-plan requires patience (1.5–3 years build time) and understanding of project risk.

Conclusion

Larnaca offers a compelling mix: competitive prices, a strategic location, and increasing global demand. From the overhaul of the Finikoudes promenade to the expansion of Larnaca Marina and the development of new residential hubs in Livadia and Pervolia, the city is undergoing a transformation that supports long-term capital growth. Now is the ideal moment to secure a foothold in one of Cyprus’ fastest-rising real estate markets.