Yes, the analysis of Lisbon's property market is included in our pack
The question of 'the best neighborhood to buy a property in Lisbon' does not have a one-size-fits-all answer.
Some of you are buying to live there, while others want to make the best investment possible. Individual preferences and circumstances matter.
That’s why the article below is covering every intent.
At Investropa, when we write a blog post or when we update our our property pack for Portugal, we want to bring solutions and cover different aims in a clear and organized way.
Enjoy the read, and please remember that we are not financial or investment experts. This article is for informational purposes only.
To improve the readability and user-friendliness of this article, we will categorize neighborhoods in Lisbon into various groups, including budget-friendly options, emerging hotspots, and areas with high rental demand, among others. Consequently, some neighborhoods may appear in multiple categories and be mentioned several times throughout the article.
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How is the real estate market in Lisbon?
The real estate market in Lisbon is currently experiencing a dynamic and vibrant phase, drawing significant attention from both local and international buyers.
One of the key strengths of Lisbon is its unique blend of historical charm and modern amenities. The city boasts a rich cultural heritage with landmarks like the Belem Tower and Jerónimos Monastery, which are not found anywhere else.
Additionally, the unique Azulejos (traditional Portuguese tiles) adorning many buildings add a distinctive aesthetic appeal to the city's architecture.
People are drawn to buy in Lisbon for several reasons.
The city offers a high quality of life with its warm climate, vibrant food scene, and friendly locals. This has made it particularly appealing to retirees, digital nomads, and professionals looking for a balance of work and leisure.
Lisbon's growing technology sector and supportive environment for startups also attract young professionals and entrepreneurs.
Foreign interest in Lisbon's real estate market is particularly high, partly due to Portugal's Golden Visa program, which offers residency to non-EU investors.
This program, combined with the city's safety, relatively affordable cost of living, and attractive culture, makes it a prime location for expatriates and investors.
Speaking of the market's dynamism, one data point to consider is the steady increase in property values over recent years, reflecting both the city's growing popularity and the ongoing investments in its infrastructure and amenities.
A unique and positive aspect of properties in Lisbon is the prevalence of historic and traditional Portuguese architecture, often featuring Pombaline-style buildings.
These structures not only embody the city's history but also offer a living experience steeped in cultural heritage, something quite unique to Lisbon.
Looking into the future, properties in Lisbon are expected to continue gaining value for several reasons. The ongoing urban renewal projects, improving infrastructure, and the city's increasing prominence as a European tech hub are major factors.
Additionally, Lisbon's continued popularity as a tourist destination ensures a steady demand for short-term rentals, further boosting property values.
Top neighborhoods in Lisbon to consider for living
Areas in Lisbon that are budget-friendly
If you're looking to buy property in Lisbon on a budget, there are a few neighborhoods you might want to consider.
Here is a summary table. Below, we will give more details.
| Neighborhood | Average Price per sqm | Property Types | Resident Demographics | Strengths | Weaknesses |
|---|---|---|---|---|---|
| Marvila | €3,000 - €4,000 | Mix of older buildings and new developments | Diverse mix of locals and newcomers | Growing cultural scene, river proximity | Some industrial areas, developing infrastructure |
| Olivais | €2,500 - €3,500 | Traditional apartments, family homes | Families, older residents | Green spaces, community feel | Longer commute, fewer trendy amenities |
| Beato | €3,000 - €4,000 | Renovated warehouses, new apartment buildings | Creative professionals, students, long-term residents | Emerging arts and business scene | Parts still under development, lack of some amenities |
Marvila
This area is relatively cheaper due to its industrial past, which has kept it off the radar for many property buyers.
However, Marvila is witnessing a transformation with new residential developments and cultural spaces, hinting at a potential increase in property values in the future. You'll find a mix of older buildings and new constructions, including apartments and lofts.
The average price per square meter in Marvila is around €3,000 to €4,000. Residents are a diverse mix of longtime locals and younger newcomers drawn by the area's evolving vibe.
The strengths of Marvila include its growing cultural scene and proximity to the river, while weaknesses include some remaining industrial areas and less developed infrastructure compared to more central neighborhoods.
Olivais
Known for being more residential and less touristy, Olivais offers more affordable housing options, with prices averaging €2,500 to €3,500 per square meter.
The lower prices are partly due to its distance from the city center, making it less attractive to short-term visitors but ideal for those seeking a quieter, more authentic Lisbon experience. Properties in Olivais range from traditional apartments to family homes.
The population is a blend of families and older residents who appreciate the area's tranquility and community feel.
Olivais's strengths include its green spaces and sense of community, while the downside might be the commute time to central Lisbon and fewer trendy amenities.
Beato
This neighborhood is currently less expensive due to its ongoing development and past as a more industrial and peripheral area.
Property values in Beato have potential for growth as the neighborhood is becoming a hub for creative industries and startups, attracting a younger, dynamic crowd. The real estate market here offers a variety of options, from renovated warehouses to new apartment buildings, with prices ranging from €3,000 to €4,000 per square meter.
The area is home to a mix of creative professionals, students, and long-term residents.
Beato's strengths include its emerging arts and business scene, while its weaknesses lie in some parts still undergoing development and a lack of some basic amenities.
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Areas in Lisbon that are popular and upscale
When looking to buy property in Lisbon, three neighborhoods stand out as upscale and popular choices. These neighborhoods each have their unique character and draw different types of residents.
| Neighborhood | Average Price/sqm | Property Types | Resident Demographic | Strengths | Weaknesses |
|---|---|---|---|---|---|
| Chiado | High | Old buildings, Modern apartments | Affluent locals, International buyers | Cultural scene, Central location | Crowded, High cost of living |
| Príncipe Real | High | Mansions, Upscale developments | Young professionals, Expatriates | Charm, Green spaces | Parking issues, Nightlife noise |
| Avenida da Liberdade | Very High | Old-world apartments, Luxury residences | Wealthy executives, International buyers | Luxury offerings, Prestigious | Lacks neighborhood feel, Heavy traffic |
Chiado
Chiado is among Lisbon's most prestigious areas, known for its luxury shopping, historical charm, and vibrant cultural scene.
Property prices in Chiado are high, reflecting the demand for this prime location. The average price per square meter in Chiado can soar, making it a significant investment.
You'll find a mix of old, beautifully renovated buildings and modern apartments. The area attracts a well-heeled crowd, including affluent locals and international buyers.
Chiado's strengths lie in its central location, architectural beauty, and cultural richness. However, it can be crowded and noisy, and the cost of living is high.
Príncipe Real
Príncipe Real is a trendy neighborhood, famous for its majestic homes, fashionable shops, and vibrant nightlife.
Properties in Príncipe Real are expensive, with a high average price per square meter. The area is known for its beautifully restored 19th-century mansions and new upscale developments.
It's a magnet for a diverse crowd, including young professionals, families, and expatriates. Príncipe Real's strengths include its blend of traditional charm and modern amenities, green spaces, and a sense of community.
On the downside, parking can be challenging, and the nightlife can be intrusive for some residents.
Avenida da Liberdade
Avenida da Liberdade is Lisbon's most exclusive boulevard, lined with luxury boutiques, five-star hotels, and fine dining.
Property prices in Avenida da Liberdade are among the highest in the city, with the average price per square meter reflecting its status. The area offers a mix of old-world apartments and modern luxury residences.
Its residents are typically wealthy, including business executives and international buyers. The strengths of Avenida da Liberdade are its central location, luxury offerings, and prestigious atmosphere.
However, it lacks the traditional neighborhood feel, and traffic can be heavy.
Make sure you understand the real estate market in Lisbon
Don't rush into buying the wrong property in Portugal. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.
Areas in Lisbon that emerge as new hotspots
Let's explore these emerging neighborhoods in Lisbon that, according to our local partners and our customers, are getting quite a bit of buzz lately.
| Neighborhood | Property Prices | Property Types | Resident Demographic | Strengths | Weaknesses |
|---|---|---|---|---|---|
| Alcântara | Affordable | Modern projects, Renovated spaces | Artists, Young entrepreneurs | Arts scene, River proximity | Some areas under development |
| Campo de Ourique | Reasonable | Traditional apartments, New developments | Families, Young professionals | Community vibe, Local amenities | Slightly removed from center |
| Marvila | Below average | Regenerated industrial spaces | Artists, Entrepreneurs, Families | Industrial-chic, Transformative | Developing identity, Lack of amenities |
Alcântara
Alcântara, once a more industrial area, is rapidly transforming into a vibrant, creative hub.
This evolution is thanks to the influx of artists and young entrepreneurs. Prices in Alcântara are still more affordable compared to the upscale areas, offering a more accessible entry point into Lisbon's property market.
The neighborhood has seen a surge in modern housing projects and renovated industrial spaces, attracting a younger, more dynamic crowd. Its popularity is likely to grow, with property prices expected to rise steadily.
The strengths of Alcântara include its emerging arts scene and proximity to the river. However, some parts are still undergoing development, which can be disruptive.
Campo de Ourique
Campo de Ourique is a charming residential neighborhood that has recently gained attention for its unique blend of traditional and modern lifestyles.
Initially more low-key, it now boasts trendy cafes, boutique shops, and a popular food market. Property prices in Campo de Ourique are reasonable, with potential for appreciation as the area becomes more sought-after.
The neighborhood offers a mix of traditional apartments and newer developments, appealing to families and young professionals. Its future popularity seems assured, given its community vibe and local amenities.
Campo de Ourique's strengths are its authenticity and quality of life, though it's slightly removed from the city center.
Marvila
Marvila, once an overlooked area, is now emerging as a hotspot for creative and tech industries.
This change is reflected in its evolving property market, where prices are still below the city average but are expected to rise. The area is experiencing a wave of regeneration, with old warehouses being converted into co-working spaces, galleries, and trendy bars.
Marvila attracts a mix of artists, entrepreneurs, and young families. Its strengths include its industrial-chic appeal and the sense of a neighborhood in transformation.
However, it's still developing its identity, and some areas lack amenities.
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Top neighborhoods in Lisbon to invest in property
Areas in Lisbon with a strong rental demand
If you're considering buying real estate in Lisbon for renting it out, these neighborhoods with high demand for rentals should be considered.
| Neighborhood | Type of Tenants | Property Type | Average Rental Income | Rental Yield | Tips | Weaknesses |
|---|---|---|---|---|---|---|
| Alfama | Young Professionals, Tourists | Traditional Apartments | €1,000-€1,200/month | 4-5% | Near landmarks, River views | Older buildings |
| Parque das Nações | Corporate Tenants, Families | Modern Apartments | €1,200-€1,500/month | 3-4% | Riverfront, Near Oceanarium | Lacks traditional charm |
| Príncipe Real | Affluent Professionals, Expats | Stylish Apartments, Townhouses | €1,300-€1,600/month | 3-4% | Unique features, Near garden | High property prices |
Alfama
Alfama is a historic and tourist-favored district, making it highly attractive for long-term rentals.
Primarily, the area attracts young professionals and tourists who seek authentic Lisbon experiences. Properties in demand in Alfama are typically traditional apartments and renovated units that blend modern amenities with classic architecture.
The average rental income for a one-bedroom apartment in Alfama is around €1,000 to €1,200 per month. Expect a rental yield of approximately 4-5%.
To maximize rental income, focus on properties near major landmarks or with views of the Tagus River. A potential weakness is the district's older buildings, which might require more maintenance.
Parque das Nações
Parque das Nações is known for its modern infrastructure and attracts a mix of corporate tenants and families.
The area is in demand for its contemporary apartments, many with amenities like gyms and pools. Rental income for a two-bedroom apartment ranges from €1,200 to €1,500 monthly, with a yield of around 3-4%.
Properties near the riverfront or the Lisbon Oceanarium are particularly lucrative.
The area's newness means higher property prices, and it may lack the 'traditional' Lisbon charm, which could deter some renters.
Príncipe Real
Príncipe Real is a fashionable area popular with affluent professionals and expats.
The demand in Príncipe Real is for stylish, well-located apartments and townhouses. A two-bedroom apartment in Príncipe Real can fetch between €1,300 and €1,600 per month, with yields around 3-4%.
Properties with unique architectural features or proximity to Príncipe Real Garden are particularly attractive.
The main drawback is the higher property prices due to the area's desirability.
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Areas in Lisbon where property prices might increase in the future
In these areas in in Lisbon you can still find properties at a reasonable price, with room for appreciation as the neighborhoods develop.
| Neighborhood | Type of Tenants | Property Type | Average Price/Night | Tips | Weaknesses |
|---|---|---|---|---|---|
| Baixa | Tourists | Furnished Apartments | €80-€120 | Near attractions, Modern amenities | Noisy, Crowded |
| Chiado | Tourists, Business Travelers | Luxury Apartments, Lofts | €100-€150 | Near landmarks, Stylish interiors | High investment, Seasonal demand |
| Bairro Alto | Younger Crowd, Weekend Travelers | Small Apartments, Studios | €70-€100 | Unique design, Near nightlife | Noisy at night |
Baixa
Baixa is a prime location for short-term rentals, mainly due to its central location and proximity to major tourist attractions.
The area is popular with tourists seeking easy access to Lisbon's landmarks. Most sought-after properties in Baixa are furnished apartments, offering convenience and comfort. Amenities like Wi-Fi and air conditioning are highly valued.
Average nightly rates in Baixa are around €80-€120. To optimize rental income, focus on well-maintained properties with modern amenities and proximity to public transport.
The downside is the area can be noisy and crowded, which might not appeal to all short-term renters.
Chiado
Chiado is an upscale district favored by tourists and business travelers for its cultural vibe and high-end shopping.
The demand in short is for luxury apartments and lofts. Properties with stylish interiors and amenities like high-speed internet and smart home features command higher rates, typically €100-€150 per night.
Target properties near cultural landmarks or with city views for better returns.
The challenge in Chiado is the higher initial investment cost and possible seasonal fluctuations in rental demand.
Bairro Alto
Bairro Alto is known for its vibrant nightlife and bohemian atmosphere, attracting a younger crowd and weekend travelers.
Ideal properties in Bairro Alto are smaller apartments or studios, with a focus on modern, quirky interiors. The average price per night in Bairro Alto is around €70-€100.
Properties with unique design elements or proximity to popular bars and restaurants tend to do well.
The main issue in Bairro Alto is the noise level at night, which could be a turn-off for some guests.
Make sure you understand the real estate market in Lisbon
Don't rush into buying the wrong property in Portugal. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.