European cities have experienced rapid (and often conflicting) transformations that include, inter alia, the environment, the economy, society, climate change, and access to affordable housing, with implications for their future development. In order to address such issues, assessing the current situation of European metropolises is crucial to understanding new urban development models. In light of these dynamics, our study focused on urban expansion in Pafos, Cyprus, between 1993 and 2021. Such dynamics were examined through photointerpretation (using kernel density estimation) via the ArcGISPro spatial analyst tool. The empirical results of this analysis are considered particularly insightful, especially those regarding urban sprawl and its implications for future land management for the study area, and could help toward shaping specific policies to guide cities towards sustainable and environmentally friendly development. The analysis reveals a gradual increase in settlements over time (55%), although the rate of growth has decreased in recent years, as a consequence of the economic crisis. Density maps revealed varying levels of urban concentration density, highlighting the presence of high-density settlement cores downtown and low-density, dispersed settlements in the surrounding districts. According to the empirical findings of this study, urban growth in Pafos features fragmented development patterns with scattered building landscapes and large empty spaces. To address the challenges of urban sprawl in the study area, specific actions are proposed to promote sustainable urban development and mitigate its negative impacts. By examining Pafos building/settlement development and urban planning, stakeholders can gain valuable insights and implement viable solutions for the future. This study contributes to the evolving discourse on urbanization, its characteristics, causes, and consequences, and highlights the importance of the “compact city” model as a counterforce to urban sprawl and a pathway to sustainability.