Authored by the expert who managed and guided the team behind the Portugal Property Pack
Yes, the analysis of Lisbon's property market is included in our pack
Lisbon's property market remains attractive for investors despite recent price increases and regulatory changes.
Property prices have risen 15-35% over the past five years, with central neighborhoods now averaging €5,500-€7,000 per square meter. Rental yields of 4-5% for long-term rentals and 5-6% for well-managed short-term rentals still offer decent returns compared to other European capitals. However, new short-term rental licenses are suspended in most central areas, and the Golden Visa program no longer applies to residential properties in Lisbon.
If you want to go deeper, you can check our pack of documents related to the real estate market in Portugal, based on reliable facts and data, not opinions or rumors.
Lisbon property prices have stabilized after significant growth, with current yields of 4-6% remaining competitive among European capitals.
Foreign buyers face 30-40% down payment requirements and total acquisition costs of 7-10% of purchase price, while new short-term rental restrictions limit investment options in historic neighborhoods.
| Investment Factor | Current Status (2025) | Key Considerations |
|---|---|---|
| Property Prices | €5,500-€7,000/m² (center) €3,000-€4,500/m² (outskirts) |
15-35% growth over 5 years, now stabilizing |
| Rental Yields | 4-5% long-term 5-6% short-term |
Higher than most European capitals |
| Financing | 3.2-4.0% mortgage rates | 30-40% down payment for foreigners |
| Golden Visa | No longer available | Residential properties excluded since 2023 |
| Short-term Rentals | New licenses suspended | 19+ neighborhoods affected, existing licenses valid |
| Market Outlook | 3-5% annual growth projected | Strong liquidity, moderate appreciation expected |
How much have property prices in Lisbon changed over the past five years, and what are current prices per square meter?
Lisbon residential property prices have increased by 15-35% over the past five years, with the strongest growth occurring between 2020 and 2024.
As of September 2025, central neighborhood prices average €5,500-€7,000 per square meter, with prime areas like Baixa, Chiado, and Príncipe Real reaching €8,000 or more per square meter. The most expensive properties in these historic districts can command even higher prices due to their unique character and location.
Emerging and more affordable neighborhoods such as Marvila, Campo de Ourique, Odivelas, and Loures currently trade at €3,500-€4,500 per square meter. These areas offer better value while still providing good connectivity to the city center.
Outskirt and suburban areas, including Almada, Caparica, Amadora, and parts of Sintra, range from €3,000-€4,500 per square meter. Coastal locations like Almada and Caparica offer attractive seaside living at these price points.
The price growth has now stabilized in 2025, making it a more predictable market for potential buyers.
What are current rental yields in Lisbon for both long-term and short-term rentals?
Long-term rental yields in Lisbon currently average 4-5% gross across the city, with some central areas achieving up to 6% for well-positioned properties.
Short-term rental yields through platforms like Airbnb typically range from 5-6% gross for well-managed properties in desirable locations. Prime zones with highly-rated listings can achieve even better performance, especially during peak tourist seasons.
The rental yield calculation becomes more favorable when you consider that these rates are higher than most Western European capitals. Properties in luxury segments tend to show lower yields due to their higher purchase prices, while mid-market apartments often deliver the best yield-to-risk ratio.
It's something we develop in our Portugal property pack.
Short-term rental performance varies significantly by season, with summer months typically showing much higher occupancy and daily rates than winter periods.
How easy is it to find tenants in Lisbon, and what are current occupancy rates?
Finding tenants in Lisbon remains relatively straightforward despite some market cooling, with long-term rental properties averaging over 90% occupancy rates.
Long-term rental demand remains high, though down 43% year-over-year in 2025. Despite this decline, properties still receive approximately 17 tenant inquiries on average per listing, indicating sustained interest from renters.
Short-term rental occupancy rates for Airbnb properties range from 64% (median) to 82% (market-wide average) annually in 2025. Well-managed listings in prime locations can achieve up to 90% occupancy during peak months, with daily rates averaging €105-€125.
The key factors affecting tenant acquisition include property condition, pricing competitiveness, and location accessibility to public transport and amenities. Properties near metro stations or in well-connected neighborhoods typically rent faster.
Seasonal variations significantly impact short-term rentals, with summer months showing much higher demand than winter periods.
What taxes and fees do I face when buying property in Lisbon?
| Cost Type | Rate/Amount | Details |
|---|---|---|
| Property Transfer Tax (IMT) | 0-7.5% for primary residence Up to 8% for non-primary |
Progressive rate based on property value |
| Stamp Duty | 0.8% of property price | Applied to all property transactions |
| Notary & Legal Fees | 1-2% of property price | Sometimes slightly higher for complex cases |
| Registration/Admin Fees | €250-€1,000 | Varies depending on case complexity |
| Total Acquisition Costs | 7-10% of purchase price | Typical range for foreign buyers |
What are the ongoing ownership costs in Lisbon?
Annual property tax (IMI) in Lisbon ranges from 0.3-0.5% of the property's fiscal value for urban properties.
Condominium fees typically cost €1.50-€3.50 per square meter per month, translating to €100-€200 monthly for standard apartments. Luxury buildings with extensive amenities charge significantly more due to higher maintenance requirements and concierge services.
Property insurance costs €150-€400 annually, depending on coverage level and property value. Comprehensive coverage including natural disasters and theft protection falls on the higher end of this range.
General maintenance and repairs should be budgeted at €1-2 per square meter annually, plus utilities and occasional larger repairs like elevator maintenance or roof work. This doesn't include major renovations or upgrades.
These ongoing costs are generally lower than many other European capitals, making Lisbon property ownership relatively affordable on an annual basis.
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How does mortgage financing work for foreigners buying in Portugal?
Foreign buyers and non-residents can obtain mortgages in Portugal but typically need to provide a 30-40% down payment, compared to 10-20% for Portuguese residents.
Current mortgage interest rates range from 3.2-4.0% as of September 2025, with rates trending slightly downward as Euribor declines. Variable rates tied to Euribor plus a bank margin are most common, though some fixed-rate options are available at marginally higher rates.
Portuguese residents can access up to 80-90% loan-to-value ratios, while non-residents are typically limited to 60-70% LTV. Banks also impose monthly debt-to-income limits, usually capping mortgage payments at 30-35% of net monthly income.
The mortgage approval process for foreigners requires extensive documentation, including proof of income, tax returns, bank statements, and sometimes a Portuguese tax number (NIF). Processing times can take 4-8 weeks depending on the lender and application complexity.
Working with a local mortgage broker familiar with foreign buyer requirements can significantly streamline the process and improve approval chances.
Are there still Golden Visa benefits for buying property in Lisbon?
Lisbon residential properties are no longer eligible for Portugal's Golden Visa program as of 2023.
The Golden Visa program shifted focus to lower-density interior regions, Madeira, Azores, or specific commercial and renovation projects within Lisbon. Buying a standard residential property in Lisbon does not qualify for Golden Visa residency benefits.
Alternative residency options remain available, including the D7 passive income visa, digital nomad visa, or other immigration pathways that don't require specific property investments. These visas have different requirements and don't provide the same investment-based residency path as the original Golden Visa.
Existing Golden Visa holders who previously invested in Lisbon property maintain their status, but new applicants must look to qualifying regions or project types outside standard Lisbon residential real estate.
This change significantly impacts investment strategies for those seeking Portuguese residency through property purchase.
How strict are short-term rental regulations in Lisbon currently?
Short-term rental regulations in Lisbon have become significantly more restrictive, with new AL (Alojamento Local) licenses suspended in most central neighborhoods.
New short-term rental licenses are completely suspended in high-density "containment zones," including the historic center areas of Baixa, Alfama, Bairro Alto, and Santa Maria Maior. At least 19 Lisbon neighborhoods now prohibit new short-term rental permits, particularly in areas where existing short-term rentals exceed 5% of total housing stock.
Existing AL licenses remain valid and can sometimes transfer with property sales, but future regulatory changes remain possible as local authorities continue reviewing the rules. Property owners with existing licenses can continue operating their short-term rentals legally.
The restrictions aim to address housing affordability concerns and reduce the impact of tourism on residential neighborhoods. These rules effectively limit new short-term rental investment opportunities in the most desirable tourist areas.
It's something we develop in our Portugal property pack.
What's the long-term outlook for Lisbon's property market?
Lisbon's property market outlook shows moderate growth projected at 3-5% annually, supported by continued demand from both domestic and international buyers.
New housing supply is entering the pipeline, but demand remains strong due to Lisbon's growing reputation as a tech hub, its attractive climate, and Portugal's favorable tax policies for foreign residents. The market has evolved from the rapid growth phase of 2020-2024 into a more stable, mature market.
Government housing policies continue to address affordability concerns, which may influence future development patterns and pricing in certain areas. These policies generally support market stability rather than dramatic price swings.
Lisbon maintains its position as Portugal's most liquid real estate market, though transaction volumes have decreased from 2022-2023 highs. Quality properties in central areas typically sell within six months, while luxury or outlying properties may take longer.
The combination of moderate growth expectations and strong underlying demand fundamentals suggests a relatively stable investment environment for the coming years.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Portugal versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
How does Lisbon compare to other European capitals for property investment?
| City | Price per m² | Rental Yield (%) | Market Outlook |
|---|---|---|---|
| Lisbon | €5,500-€7,000 | 4-5% (up to 6% STR) | Moderate growth |
| Madrid | €4,900-€6,000 | 3.5-4.5% | Stable |
| Berlin | €6,000-€8,500 | 2.8-3.5% | Plateau/moderate growth |
| Paris | €10,000-€13,000 | 2.5-3% | Flat/slight decline |
| Vienna | €5,500-€7,000 | 3-3.5% | Stable/moderate growth |
What currency exchange risks should I consider when buying from abroad?
Buying Lisbon property from abroad exposes investors to Euro exchange rate fluctuations, which can significantly impact the total investment cost and returns.
Currency risk affects both the initial purchase price and ongoing costs like mortgage payments, maintenance fees, and taxes if your income is in a different currency. A 10% currency movement can substantially change your effective purchase price and annual carrying costs.
Mitigation strategies include using forward contracts to lock in exchange rates, staging deposit payments over time to average out currency fluctuations, and working with professional foreign exchange services rather than traditional banks for better rates.
Consider the currency exposure of your rental income as well - if you're earning Euros but your primary income is in another currency, this can provide some natural hedging for your investment.
Professional FX services typically offer better rates and more sophisticated hedging tools than retail banks, potentially saving thousands on large property transactions.
How liquid is Lisbon's property market for future resale?
Lisbon remains Portugal's most liquid real estate market, though transaction volumes have decreased from their 2022-2023 peaks.
Quality properties in central neighborhoods typically sell within six months under normal market conditions. Properties in prime locations with good transport links and amenities generally move faster than luxury properties or those in outlying areas.
When selling, expect total transaction costs of 5-7% of the sale price, including real estate agent commissions, legal fees, paperwork costs, and potential capital gains tax. Agent commissions typically range from 3-5% of the sale price.
It's something we develop in our Portugal property pack.
The market's liquidity benefits from Lisbon's international profile, diverse buyer base including both Portuguese and foreign investors, and strong rental market fundamentals that support property values.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Lisbon's property market in September 2025 offers moderate returns with manageable risks for informed investors.
While the explosive growth period has ended, the combination of stable yields, strong liquidity, and Portugal's attractive living environment continues to make Lisbon property investment viable for both capital appreciation and rental income strategies.
Sources
- MonoEstate - 2025 Lisbon Property Market Guide
- Bleisured - Buying Property in Lisbon 2025
- Global Property Guide - Portugal Rental Yields
- InvestRopa - Average House Prices Portugal
- Portugal Property - Best Investment Locations
- Leading RE - Portugal Property Investment 2025
- Portugal Buyers Agent - House Prices
- AirROI - Lisbon Airbnb Report
- Airbtics - Lisbon Airbnb Revenue
- PriceLabs - Portugal Vacation Rental Market 2025