Cyprus experiences the highest level of water stress among European Union countries due to several interplaying factors such as rainfall variability and increasing water demand. These instigate the nation to build dams on almost all rivers of the island to satisfy the requirements for drinking water and irrigation. Many studies have been primarily conducted on assessing water availability for various uses, particularly for drinking water supply and irrigation. However, there is still a gap/less explored area in terms of a better understanding of changes in surface water over time. Thus, this study aims to evaluate the water surface area variation in Cyprus over the past four decades based on remote sensing products, timeseries analysis and trend detection. The result reveals a statistically significant increasing trend (p < 0.05) in water surface area between 1984–2021. However, following the completion of the final reservoir in 2010, a statistically significant decreasing trend (p < 0.05) was observed in the permanent water surface area. This decline is related to both climatic variability and increased water demands. We observed cycles of 6, 8, and 11 years in permanent water. These cycles indicate a recurring pattern of water scarcity, with severe implication already observed on both economic activity and agriculture. The recent decade has witnessed a decline in rainfall, and this is evident through the decrease in vegetation greenness in rainfed agricultural regions, highlighting its impact. Therefore, the findings of this study underscore not only the necessity for the development of infrastructure aimed at conserving water, but also reinforces the need to discuss water use priorities in Cyprus.