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 residential property market in 2026 offers foreign buyers a wide range of opportunities, from high-yield inner-city apartments to family-friendly neighborhoods with strong long-term appreciation potential.
However, navigating this market requires understanding neighborhood-level nuances, especially around short-term rental regulations that can make or break your investment strategy.
We constantly update this blog post to reflect the latest data and market shifts, so you always have current information at your fingertips.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Lisbon.
What's the Current Real Estate Market Situation by Area in Lisbon?
Which areas in Lisbon have the highest property prices per square meter in 2026?
As of early 2026, the three most expensive areas in Lisbon are Santo António (around Avenida da Liberdade and Príncipe Real), Avenidas Novas (near Saldanha and Campo Pequeno), and Misericórdia (covering Chiado and Bairro Alto), where prices reach premium levels that reflect their central locations and prestige.
In these top-tier Lisbon neighborhoods, you can expect to pay between 6,900 and 7,500 euros per square meter, with Santo António topping the list at approximately 7,485 euros per square meter.
Each of these areas commands high prices for distinct reasons that go beyond simple centrality:
- Santo António: Home to Lisbon's luxury retail corridor and embassies, attracting wealthy buyers and diplomats.
- Avenidas Novas: Combines excellent metro access with the Gulbenkian cultural hub and established professional services.
- Misericórdia: Historic charm meets vibrant nightlife and walkable access to iconic landmarks like Chiado.
Which areas in Lisbon have the most affordable property prices in 2026?
As of early 2026, the most affordable areas in Lisbon for property buyers are Santa Clara in the northern periphery, Carnide (including the Telheiras area), Olivais, and Beato near the riverfront, where prices remain significantly below the city average.
In these more accessible Lisbon neighborhoods, prices typically range from around 3,800 to 4,900 euros per square meter, with Santa Clara being the most affordable at approximately 3,817 euros per square meter.
The trade-offs vary by area: Santa Clara offers lower prices but has weaker buyer depth and longer commute times; Carnide feels more suburban with fewer walkable amenities; Olivais has aging housing stock that may need renovation; and Beato, while improving, still has pockets with limited retail and services.
You can also read our latest analysis regarding housing prices in Lisbon.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Portugal. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
Which Areas in Lisbon Offer the Best Rental Yields?
Which neighborhoods in Lisbon have the highest gross rental yields in 2026?
As of early 2026, the Lisbon neighborhoods delivering the highest gross rental yields are Arroios (around 5.1%), São Vicente including Graça (around 5.0%), Santa Clara (around 4.9%), and Ajuda (around 4.8%), where relatively affordable purchase prices combine with solid rental demand.
Across Lisbon as a whole, typical gross rental yields range from about 3.5% in premium modern areas like Parque das Nações to over 5% in these higher-performing inner-ring and peripheral neighborhoods.
Each top-yielding neighborhood has a specific reason for its strong returns:
- Arroios (Anjos, Intendente): Young professionals and students flock here for its central location at lower rents.
- São Vicente (Graça): Authentic Lisbon charm draws long-term tenants willing to pay for character.
- Santa Clara: Low entry prices mechanically boost yields, though tenant screening matters more here.
- Ajuda: Proximity to Belém attracts tenants wanting riverside access without riverside prices.
Finally, please note that we cover the rental yields in Lisbon here.
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Which Areas in Lisbon Are Best for Short-Term Vacation Rentals?
Which neighborhoods in Lisbon perform best on Airbnb in 2026?
As of early 2026, the Lisbon neighborhoods that perform best on Airbnb are Santa Maria Maior (Baixa, Alfama, Mouraria), Misericórdia (Chiado, Bairro Alto, Cais do Sodré), and Santo António (Avenida da Liberdade, Príncipe Real), where high tourist foot traffic translates to strong occupancy and premium nightly rates.
In these top-performing Lisbon short-term rental areas, well-managed properties can generate monthly revenues ranging from approximately 1,500 to 3,000 euros depending on size, season, and quality of furnishing.
Each area excels for different reasons that matter to short-term rental success:
- Santa Maria Maior (Baixa, Alfama): Walking distance to major landmarks keeps bookings consistent year-round.
- Misericórdia (Bairro Alto, Chiado): Nightlife and dining scene attracts younger travelers willing to pay more.
- Santo António (Príncipe Real): Upscale positioning commands higher nightly rates from affluent visitors.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Lisbon.
Which tourist areas in Lisbon are becoming oversaturated with short-term rentals?
The three Lisbon tourist areas most clearly oversaturated with short-term rentals are Santa Maria Maior (covering Baixa, Alfama, Mouraria, and Castelo), Misericórdia (including Bairro Alto, Chiado, and Bica), and Santo António (around Avenida da Liberdade and Príncipe Real), where the concentration of vacation rentals has triggered strict licensing restrictions.
In Santa Maria Maior, short-term rental units now represent approximately 67% of the total housing stock, while Misericórdia sits at around 44% and Santo António at roughly 25%, creating neighborhoods where tourists far outnumber permanent residents.
The clearest sign of oversaturation in these Lisbon areas is not just the high listing count but the fact that municipal authorities have placed them under "absolute containment" status, meaning new Alojamento Local (AL) licenses are essentially blocked, which directly limits new investors' ability to operate legally.
We have made this infographic to give you a quick and clear snapshot of the property market in Portugal. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Which Areas in Lisbon Are Best for Long-Term Rentals?
Which neighborhoods in Lisbon have the strongest demand for long-term tenants?
The Lisbon neighborhoods with the strongest demand for long-term tenants are Santo António (Avenida da Liberdade, Príncipe Real), Estrela (Lapa, Santos-o-Velho), Arroios (Anjos, Intendente, Alameda), and Avenidas Novas (Saldanha, Campo Pequeno), where rental listings tend to move quickly due to consistent professional and family interest.
In these high-demand Lisbon rental areas, well-priced apartments typically find tenants within two to four weeks, with vacancy rates remaining low even during slower seasons due to the stable tenant base.
The tenant profiles driving demand differ by neighborhood:
- Santo António: Embassy staff, executives, and professionals working in nearby corporate offices.
- Estrela (Lapa): Diplomats, older professionals, and families seeking quieter prestigious addresses.
- Arroios: Young professionals, creative workers, and students drawn by central access at lower rents.
- Avenidas Novas: Mid-career professionals and small families wanting metro access and urban services.
One key characteristic uniting these neighborhoods is excellent public transport access: Santo António and Avenidas Novas sit on major metro lines, Arroios benefits from multiple stations, and Estrela will gain connectivity with planned metro expansions, making daily commutes practical without a car.
Finally, please note that we provide a very granular rental analysis in our property pack about Lisbon.
What are the average long-term monthly rents by neighborhood in Lisbon in 2026?
As of early 2026, average long-term monthly rents in Lisbon vary widely by neighborhood, from around 775 euros for a one-bedroom apartment in Santa Clara to over 1,390 euros for the same size unit in Santo António near Avenida da Liberdade.
In Lisbon's most affordable rental neighborhoods like Santa Clara and Benfica, you can find entry-level one-bedroom apartments for approximately 775 to 875 euros per month, making them accessible for budget-conscious tenants.
For mid-range Lisbon neighborhoods like Arroios, Avenidas Novas, and Alvalade, typical one-bedroom rents fall between 1,000 and 1,150 euros per month, while two-bedroom apartments in these areas run from about 1,600 to 1,840 euros monthly.
In Lisbon's most expensive rental neighborhoods such as Santo António, Misericórdia, and Estrela, one-bedroom apartments command around 1,240 to 1,390 euros per month, with three-bedroom units reaching 2,700 to 3,050 euros monthly for families or sharers.
You may want to check our latest analysis about the rents in Lisbon here.
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Which Are the Up-and-Coming Areas to Invest in Lisbon?
Which neighborhoods in Lisbon are gentrifying and attracting new investors in 2026?
As of early 2026, the Lisbon neighborhoods experiencing the clearest gentrification and attracting investor interest are Marvila (around Braço de Prata and Hub Criativo do Beato), Benfica, Penha de França (near Alto de São João), and Olivais, where rising prices signal growing demand from both residents and buyers.
These gentrifying Lisbon neighborhoods have posted annual price appreciation ranging from around 11% in Olivais to over 31% in Marvila over the past year, significantly outpacing the city average and indicating strong investor momentum.
Which areas in Lisbon have major infrastructure projects planned that will boost prices?
The Lisbon areas most likely to see property price boosts from infrastructure projects are Estrela (including Campo de Ourique edges and Lapa), Alcântara (around LX Factory corridor), and parts of the western inner ring, where planned metro expansions will significantly improve accessibility.
The key projects are the new Metropolitano de Lisboa stations at Estrela and Santos, which will bring metro access to neighborhoods that currently rely on buses and trams, plus the Red Line extension toward Alcântara that has been part of the network expansion planning.
Historically in Lisbon, areas gaining new metro stations have seen property price increases of 10% to 20% in the years following station openings, as improved commute times attract both owner-occupiers and investors seeking tenant demand.
You'll find our latest property market analysis about Lisbon here.
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.
Which Areas in Lisbon Should I Avoid as a Property Investor?
Which neighborhoods in Lisbon with lots of problems I should avoid and why?
The Lisbon neighborhoods that present the most challenges for property investors in 2026 are the historic tourist core areas if you plan to operate short-term rentals, specifically Santa Maria Maior, Misericórdia, Santo António, São Vicente, Arroios, and Estrela, where regulatory restrictions can block your investment strategy entirely.
Each of these areas has a specific issue that makes new investment difficult:
- Santa Maria Maior (Baixa, Alfama): Highest AL saturation at 67%, with new short-term rental licenses blocked.
- Misericórdia (Bairro Alto, Chiado): Around 44% AL saturation and "absolute containment" status for new licenses.
- Santo António: Premium prices with declining values (down 4% yearly) and tight AL restrictions.
- São Vicente (Graça): Popular tourist area now under containment, limiting short-term rental options.
- Parque das Nações: Expensive entry with Lisbon's lowest gross yield at around 3.5%.
For these neighborhoods to become viable again for short-term rental investors, Lisbon's municipal government would need to lift the containment measures and reduce the AL-to-housing ratio thresholds, which appears unlikely given the ongoing political pressure to preserve residential housing stock.
Buying a property in the wrong neighborhood is one of the mistakes we cover in our list of risks and pitfalls people face when buying property in Lisbon.
Which areas in Lisbon have stagnant or declining property prices as of 2026?
As of early 2026, the Lisbon areas showing stagnant or declining property prices include Santa Clara (down approximately 7.7% year-over-year), Santo António (down around 4.1%), Areeiro (down roughly 2.6%), Estrela (down about 0.7%), and Beato (essentially flat), suggesting these markets face headwinds that other neighborhoods have avoided.
Over the past year, these underperforming Lisbon areas have seen price movements ranging from nearly 8% decline in Santa Clara to slight negative or flat growth in central zones like Estrela and Beato, contrasting sharply with double-digit gains elsewhere in the city.
The underlying causes differ by neighborhood:
- Santa Clara: Peripheral location with weaker buyer depth makes resale slower and riskier.
- Santo António: Prices hit affordability ceilings and mix effects from high-end stock skew averages.
- Areeiro: Less distinctive character leaves it squeezed between cheaper and more prestigious alternatives.
- Estrela: Some softness as investors await metro station completion to justify premium pricing.
- Beato: Redevelopment potential not yet translating into consistent buyer confidence.
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Which Areas in Lisbon Have the Best Long-Term Appreciation Potential?
Which areas in Lisbon have historically appreciated the most recently?
The Lisbon areas that have appreciated the most over recent years are Marvila, Parque das Nações, Benfica, and Penha de França, where transformation narratives and improving fundamentals have driven prices significantly higher than the city average.
Here is what each top-performing area has achieved:
- Marvila: Approximately 32% annual appreciation as industrial-to-creative conversion accelerates.
- Parque das Nações: Around 17% yearly growth as modern family-friendly stock stays in demand.
- Benfica: Roughly 17% annual increase driven by metro access and family-oriented buyers.
- Penha de França: About 16% yearly appreciation as inner-ring location gains recognition.
The main driver behind this above-average appreciation in Lisbon is not tourist appeal but rather the combination of improving infrastructure, strong rental demand from local tenants, and relatively lower starting prices that left room for re-rating as the city expanded eastward and northward.
By the way, you will find much more detailed trends and forecasts in our pack covering there is to know about buying a property in Lisbon.
Which neighborhoods in Lisbon are expected to see price growth in coming years?
The Lisbon neighborhoods best positioned for price growth in coming years are Alcântara (benefiting from metro expansion), Estrela and Campo de Ourique edges (gaining new station connectivity), Arroios and Penha de França (offering yield support with room to re-rate), and Marvila (continuing its redevelopment momentum).
Expected growth rates vary by neighborhood:
- Alcântara: Projected 10% to 15% uplift as Red Line extension improves access to central Lisbon.
- Estrela/Campo de Ourique: Likely 8% to 12% growth once new Santos and Estrela metro stations open.
- Arroios/Penha de França: Steady 6% to 10% annually as rental yields continue attracting investors.
- Marvila: Potentially 10% to 20% but with higher volatility depending on specific street and project.
The single most important catalyst expected to drive future price growth in these Lisbon neighborhoods is the metro network expansion, which will dramatically reduce commute times and make areas that currently feel "just outside central" function as genuinely central neighborhoods.
We made this infographic to show you how property prices in Portugal compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
What Do Locals and Expats Really Think About Different Areas in Lisbon?
Which areas in Lisbon do local residents consider the most desirable to live?
The Lisbon areas that local residents consider most desirable to live are Estrela (especially Lapa and Campo de Ourique), Avenidas Novas (around Saldanha), Alvalade, and Belém (particularly Restelo), where established residential character combines with good services and a sense of neighborhood identity.
Each area appeals to locals for specific reasons:
- Estrela (Lapa, Campo de Ourique): Quiet, tree-lined streets with a village feel inside the city.
- Avenidas Novas (Saldanha): Practical central location with excellent metro access and everyday services.
- Alvalade: Classic Lisbon grid with parks, schools, and strong community atmosphere.
- Belém (Restelo): Spacious apartments, calmer pace, and proximity to riverside green spaces.
The resident demographic in these locally-preferred Lisbon areas tends to be established Portuguese families, professionals in their 30s to 50s, and retirees who prioritize livability and neighborhood stability over tourist-area buzz.
Interestingly, local preferences in Lisbon often differ from foreign investor targets: locals favor quieter residential zones like Alvalade and Campo de Ourique, while foreign buyers frequently gravitate toward tourist-heavy areas like Alfama or Bairro Alto that locals increasingly avoid due to noise and overtourism.
Which neighborhoods in Lisbon have the best reputation among expat communities?
The Lisbon neighborhoods with the best reputation among expat communities are Parque das Nações, Campo de Ourique (within Estrela), Santo António (Príncipe Real and Avenida da Liberdade), and Alvalade, where modern amenities, safety, and accessibility to international services create comfortable landing spots for newcomers.
Expats prefer these neighborhoods for distinct reasons:
- Parque das Nações: Modern apartments, international schools nearby, and family-friendly infrastructure.
- Campo de Ourique: Walkable village atmosphere with cafes, markets, and a welcoming local vibe.
- Santo António (Príncipe Real): Upscale dining, English-speaking services, and cosmopolitan character.
- Alvalade: Authentic Lisbon living with parks, schools, and strong community integration.
The expat profiles in these Lisbon neighborhoods tend to be remote workers and digital nomads in Campo de Ourique and Príncipe Real, corporate transferees and diplomats in Santo António, and families with children in Parque das Nações and Alvalade.
Which areas in Lisbon do locals say are overhyped by foreign buyers?
The Lisbon areas that locals most commonly consider overhyped by foreign buyers are Santa Maria Maior (Baixa, Alfama, Mouraria), Misericórdia (Bairro Alto, Chiado, Cais do Sodré), and parts of Santo António (around Avenida da Liberdade), where tourist appeal has driven prices far beyond what the living experience justifies to residents.
Locals cite specific concerns for each area:
- Santa Maria Maior (Alfama, Baixa): Noise, crowds, and lack of everyday services for actual residents.
- Misericórdia (Bairro Alto): Late-night disturbances from bars and restaurants dominate the neighborhood.
- Santo António (Avenida da Liberdade): Premium prices for addresses that feel commercial rather than residential.
What foreign buyers typically see in these Lisbon areas that locals do not value as highly is the "postcard" appeal: historic charm, famous landmarks, and walkable tourist attractions that matter for vacation memories but create daily friction for anyone trying to live a normal life with groceries, parking, and quiet evenings.
By the way, we've written a blog article detailing the experience of buying a property as a foreigner in Lisbon.
Which areas in Lisbon are considered boring or undesirable by residents?
The Lisbon areas that residents most commonly consider boring or undesirable are Carnide (including Telheiras), Santa Clara (northern periphery), and parts of Lumiar (like Quinta das Conchas), where the quiet suburban character feels disconnected from the energy that draws people to Lisbon.
Residents find these areas less appealing for specific reasons:
- Carnide (Telheiras): Suburban feel with limited nightlife, dining, or cultural destinations within walking distance.
- Santa Clara: Far from the center with longer commutes and fewer distinctive neighborhood features.
- Lumiar (Quinta das Conchas): Residential and family-oriented but lacking the cafes and street life that define central Lisbon.
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What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Lisbon, we always rely on the strongest methodology we can, and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why It's Authoritative | How We Used It |
|---|---|---|
| Statistics Portugal (INE) | Portugal's official national statistics office for housing and economic data. | We used INE to anchor our macro market context for prices, transactions, and credit rates. We cross-checked private indexes against official figures to ensure accuracy. |
| idealista/data (Sales) | Major Iberian property portal with transparent, long-running price reporting. | We used this for sale asking prices by freguesia to rank most expensive and affordable areas. We also extracted yearly price changes to identify market momentum. |
| idealista/data (Rents) | One of the few public sources providing complete freguesia-level rent tables. | We used this for rent per square meter data and computed gross yields consistently across all Lisbon neighborhoods using the same methodology. |
| Confidencial Imobiliário | Well-known Portuguese housing data provider whose index is widely quoted. | We used their price index to validate that Lisbon's price trends aren't just an asking-price story. We added quarterly trend context to our analysis. |
| AirDNA | One of the most widely used short-term rental analytics providers globally. | We used this for city-level occupancy and average daily rates to ground our Airbnb analysis in observed performance rather than speculation. |
| Metropolitano de Lisboa | The official metro operator's published expansion plans, not press speculation. | We used this to identify where new stations are officially planned and where accessibility premiums can rise, supporting our infrastructure catalyst analysis. |
| Câmara Municipal de Lisboa | The city's official channel for Alojamento Local planning and regulation. | We used this as the authoritative reference for AL regulation context and to anchor news summaries about licensing restrictions. |
| Cuatrecasas | Top-tier law firm providing detailed legal analysis of municipal regulations. | We used their notes to verify the procedural details of AL suspensions and cross-check media reporting on licensing restrictions. |
| Executive Digest | Business press providing concrete AL saturation percentages by freguesia. | We used this to quantify oversaturation risk in specific central freguesias. We justified our "avoid for new AL licenses" guidance with these figures. |
| PwC Portugal | Big-4 firm providing carefully sourced tax commentary updated around budgets. | We used this to frame transaction tax realities for foreign buyers in early 2026. We relied on it as a high-quality, non-blog tax reference. |
| Reuters | Top-tier news wire citing officials with concrete policy program parameters. | We used this to explain demand-side policy support affecting liquidity in lower and mid price bands. We cross-checked policy context with this source. |
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