Cyprus construction sector records strong growth in early 2026

Nicosia, Cyprus. Cyprus’ construction sector maintained strong growth in the first half of 2026, supported by new projects, property demand and investment activity, according to Eurobank Research. First-quarter indicators pointed to continued expansion, although the report said future data would show whether regional tensions affect developers’ plans.

Building permits and project values

The construction pipeline strengthened during the first quarter of 2026, with building permits rising 44 per cent year-on-year to 2,276.

Approved dwellings increased by 58 per cent to 5,403, while total permitted floor area grew by 40 per cent to 1 million square metres. The value of approved construction projects rose 41 per cent to €1.3 billion.

Eurobank Research said the figures reflected continued investor appetite and a growing concentration of larger, higher-value developments.

Housing demand and lending

Mortgage lending increased by 19.5 per cent year-on-year during the first five months of 2026, according to the report.

The increase reflected strong underlying housing demand and suggested residential construction activity was likely to remain supported in the coming quarters. Current construction activity also continued to strengthen.

Regional uncertainty

The report noted that the latest building permit data covered January to March 2026, before the recent escalation of tensions in the Middle East.

It said subsequent data releases would provide a clearer indication of whether developers’ investment intentions remain as strong following the regional conflict.