Authored by the expert who managed and guided the team behind the Portugal Property Pack
Everything you need to know before buying real estate is included in our Portugal Property Pack
Portugal's residential property market has become one of Europe's most attractive destinations for both investors and homebuyers in 2025.
Property prices in Portugal range from €1,485 per square meter in the Azores to €6,934 per square meter in central Lisbon, with significant variations between coastal areas, city centers, and rural regions. As of September 2025, buyers should expect to pay additional costs of 8-10% on top of the purchase price for taxes and fees, while mortgage rates for foreigners typically range from 3.8% to 5.5% with minimum deposits of 30% for non-residents.
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.
Portugal's property market continues its upward trajectory with Lisbon leading at €5,642 per square meter as of September 2025, while coastal Algarve properties average €3,334-€4,385 per square meter.
Foreign buyers face stricter mortgage conditions but can still access competitive rates, with total acquisition costs including taxes and fees typically adding 8-10% to the property's purchase price.
| Region | City Center Price (€/m²) | Suburban/Rural Price (€/m²) | Rental Yield (%) | 5-Year Growth (%) |
|---|---|---|---|---|
| Lisbon | €5,560-€6,934 | €3,644-€4,935 | 4-6% | 45-50% |
| Porto | €4,296-€4,883 | €3,000-€3,937 | 5-7% | 35-40% |
| Algarve | €3,334-€4,385 | €2,500-€3,000 | 5-7.5% | 30-35% |
| Madeira | €3,003 | €2,200-€2,800 | 5-6% | 25-30% |
| Centro | €1,448 | €1,000-€1,300 | 6-8% | 20-25% |
| Alentejo | €1,507-€1,591 | €1,200-€1,400 | 6-8% | 20-25% |
| Azores | €1,485 | €1,100-€1,300 | 5-7% | 15-20% |
Fact-checked and reviewed by our local expert
João Morais 🇵🇹
Founder | Real Estate Advisor, at Wilderness Investments
How much does the average home cost per square meter in Lisbon, Porto, and the Algarve right now?
As of September 2025, Lisbon remains Portugal's most expensive property market with prices averaging €5,642 per square meter in the city center.
The Portuguese capital's property prices have increased by 7.2% year-on-year, with prime neighborhoods like Chiado and Avenida da Liberdade commanding the highest premiums. Lisbon's metropolitan area ranges from €3,644 to €4,935 per square meter, depending on the specific location and proximity to the city center.
Porto follows as the second most expensive major city, with city center properties averaging €4,296 to €4,883 per square meter. The broader Porto metropolitan area, including municipalities like Vila Nova de Gaia and Matosinhos, offers more affordable options at around €3,000 to €3,937 per square meter. Porto's market has shown steady growth with a 5.84% increase over the past year.
The Algarve coastal region averages €3,334 to €4,385 per square meter, driven primarily by strong international demand and tourism appeal. Luxury areas within the "Golden Triangle" of Vale do Lobo, Quinta do Lago, and Almancil can reach €9,850 to €12,300 per square meter for premium properties.
It's something we develop in our Portugal property pack.
What are the differences in price between buying in the city center versus suburban or rural areas?
City center properties in Portugal command significant premiums compared to suburban and rural areas, with price differences often reaching 30-100% depending on the region.
In Lisbon, city center properties cost 30-45% more than suburban areas, with the difference becoming even more dramatic when comparing to rural locations. For example, while central Lisbon averages €5,560-€6,934 per square meter, suburban areas range from €3,644-€4,935 per square meter. Rural areas outside the metropolitan region can drop to €1,500-€2,500 per square meter.
Porto exhibits similar patterns, where city center properties at €4,296-€4,883 per square meter contrast with suburban areas at €3,000-€3,937 per square meter. Moving further into rural Norte region areas, prices can fall to €2,168 per square meter or lower, representing savings of up to 50% compared to Porto's city center.
The Algarve shows the most dramatic coastal versus inland price variations. Coastal properties in popular resort areas command €3,334-€4,385 per square meter, while inland Algarve properties often trade for €1,000-€3,000 per square meter, offering substantial savings for buyers willing to sacrifice beachfront proximity.
How much more expensive are coastal properties compared to inland ones in Portugal?
Coastal properties in Portugal typically cost 50-150% more than comparable inland properties, with the premium varying significantly based on the specific coastal location and tourism appeal.
The Algarve demonstrates the most pronounced coastal premium, where beachfront properties can cost €4,000-€6,000 per square meter compared to inland properties at €1,000-€3,000 per square meter. This represents a price difference of up to 200% in popular resort areas like Albufeira, Lagos, and Vilamoura.
Along Portugal's Silver Coast and around Lisbon's coastal suburbs like Cascais and Estoril, coastal properties command premiums of 40-80% over inland alternatives. Cascais, for instance, averages €4,000-€8,000 per square meter compared to inland Lisbon metropolitan areas at €3,644-€4,935 per square meter.
Porto's coastal areas, including Matosinhos and Vila Nova de Gaia waterfront properties, typically cost 25-50% more than inland Porto metropolitan properties. The coastal premium is generally lower in northern Portugal due to less tourism pressure compared to southern coastal regions.
International buyer demand significantly drives these coastal premiums, with foreign investors representing over 60% of purchases in prime coastal areas according to recent market data.
What are the typical prices for apartments versus standalone houses in the main regions?
| Region | Apartments (€/m²) | Standalone Houses (€/m²) | Price Difference |
|---|---|---|---|
| Lisbon City Center | €5,560-€6,934 | €4,200-€5,500 | Apartments 20-25% higher |
| Porto City Center | €4,296-€4,883 | €3,800-€4,200 | Apartments 10-15% higher |
| Algarve Coastal | €3,334-€4,385 | €2,800-€3,800 | Apartments 15-20% higher |
| Madeira | €3,003-€3,500 | €2,500-€3,200 | Apartments 15% higher |
| Centro Region | €1,448-€1,800 | €1,200-€1,600 | Apartments 10-15% higher |
| Alentejo | €1,507-€1,591 | €1,300-€1,500 | Minimal difference |
| Azores | €1,485-€1,700 | €1,200-€1,400 | Apartments 15-20% higher |
How much does a newly built home usually cost compared to an older property that needs renovation?
Newly built properties in Portugal typically cost 25-50% more per square meter than older properties requiring renovation, though this gap varies significantly by location and property condition.
New construction in major cities averages €2,700-€3,500 per square meter for mid-to-high range developments, while luxury new builds in central Lisbon can reach €8,000-€12,000 per square meter. These properties come with modern finishes, energy-efficient systems, and contemporary design standards that command premium pricing.
Older properties needing renovation often trade below €2,000 per square meter outside prime locations, with some requiring extensive work available for €1,200-€1,800 per square meter. However, buyers must factor renovation costs of €500-€1,500 per square meter depending on the scope of work required.
The total investment for purchasing and renovating an older property can sometimes exceed new construction costs, especially when structural work is needed. Properties built before 1980 may require significant updates to meet current energy efficiency and safety standards, adding substantial costs to the initial purchase price.
Market demand strongly favors move-in-ready properties, making new construction and recently renovated homes appreciate faster than older properties requiring work.
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What are the extra costs on top of the listing price, like taxes, notary fees, and agency commissions?
Extra costs when buying property in Portugal typically add 8-10% to the purchase price for properties under €1 million, with higher percentages for more expensive properties.
| Cost Type | Rate/Amount | Details |
|---|---|---|
| IMT Transfer Tax | 0-8% (avg. 6-7%) | Progressive scale based on property value |
| Stamp Duty (IS) | 0.8% | Fixed rate on property purchase price |
| Notary & Registry Fees | €1,250-€1,350 | Fixed costs per transaction |
| Legal Fees | 1% + VAT | Lawyer strongly recommended |
| Property Valuation | €300-€500 | Required for mortgage applications |
| Agency Commission | Paid by seller | No cost to buyer |
| VAT (new builds) | 23% | On construction value only |
How much should I budget for ongoing costs like property taxes, condominium fees, and maintenance?
Ongoing property ownership costs in Portugal typically range from 1.5-3% of the property's value annually, depending on property type, location, and building amenities.
Municipal Property Tax (IMI) ranges from 0.3% to 0.8% of the cadastral value annually, with urban properties generally taxed at 0.3-0.5% and rural properties at 0.8%. Properties with cadastral values exceeding €600,000 face an additional AIMI tax of 0.7-1%, significantly increasing the tax burden for luxury properties.
Condominium fees for apartments vary widely based on building amenities and services. Basic buildings charge €30-€50 monthly, while properties with elevators, pools, gyms, and security services can cost €80-€250 monthly. Luxury developments with concierge services and extensive facilities may charge €200-€400 monthly.
Maintenance costs for standalone houses typically require €1,000-€3,000 annually for routine upkeep, with older properties requiring higher maintenance budgets. Property insurance, mandatory for mortgaged properties, costs €200-€500 annually depending on coverage and property value.
Utility costs including electricity, gas, water, and internet average €120-€250 monthly for a typical family residence, with coastal properties often having higher utility consumption due to air conditioning usage.
What is the typical mortgage rate in Portugal today and how much deposit do I need?
Mortgage rates in Portugal have dropped to their most attractive levels in 18 months, with current rates ranging from 3.8% to 5.5% TAEG (Annual Percentage Rate of Charge) as of September 2025.
Foreign buyers typically face mortgage rates of 3.8-5.5% TAEG, which includes the base interest rate plus all associated fees and insurance costs. The European Central Bank's recent policy adjustments have brought rates down from their 2023-2024 peaks, with further decreases expected through 2025 as inflation continues to moderate.
Non-resident buyers must provide minimum deposits of 30-40% of the property's purchase price, significantly higher than the 10-20% typically required for Portuguese residents. Maximum loan-to-value ratios for foreigners range from 60-70%, compared to 80-90% available to residents.
Mortgage terms typically span 25-30 years for foreign buyers, with loan approval based on debt-to-income ratios not exceeding 30-35% of net monthly income. Portuguese banks require comprehensive documentation including foreign credit reports, income verification, and property valuations before approval.
Additional mortgage-related costs include life insurance (mandatory), property insurance, bank fees of €500-€2,000, and ongoing administrative charges that are factored into the TAEG calculation.
How much more do foreigners usually end up paying compared to locals, if at all?
Foreigners typically pay similar property prices to locals but face higher financing costs and stricter mortgage conditions, resulting in 15-25% higher total acquisition costs.
Property purchase prices are generally the same for foreigners and Portuguese citizens, with no official price discrimination. However, competitive bidding situations often favor foreign buyers with cash offers or larger down payments, potentially driving up final purchase prices in desirable areas.
Mortgage conditions create the main cost differential, with foreigners requiring 30-40% deposits versus 10-20% for residents, effectively requiring €90,000-€120,000 more upfront capital for a €300,000 property purchase. Interest rates for non-residents typically carry premiums of 0.5-1% above resident rates.
Foreign buyers also face additional documentation and verification costs, including document translations, apostille certifications, and extended legal due diligence processes that can add €1,000-€3,000 to transaction costs.
Tax obligations remain identical regardless of nationality, though non-residents may require fiscal representatives for ongoing tax compliance, adding annual costs of €500-€1,500 depending on property complexity and rental income.
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.
What is the average rental yield in different parts of Portugal and how does it compare with home prices?
Rental yields in Portugal range from 4% to 8% annually, with higher yields generally found in more affordable inland regions and lower yields in expensive coastal and urban areas.
Lisbon city center offers rental yields of 4-6%, reflecting the high property prices relative to rental income. The broader Lisbon metropolitan area provides slightly better yields of 5-7%, with suburban areas like Setúbal and Barreiro achieving 7.3-7.8% yields due to lower purchase prices.
Porto delivers more attractive investor returns with city center yields of 5.9% and metropolitan area yields reaching 6.6%. This higher yield reflects Porto's more moderate property prices compared to Lisbon while maintaining strong rental demand from students, professionals, and tourists.
The Algarve coastal region offers yields of 5-7.5%, with seasonal rental potential significantly boosting annual returns for tourist-oriented properties. However, buyers must consider seasonal vacancy periods and higher maintenance costs for vacation rental properties.
Inland regions including Centro, Alentejo, and northern areas provide the highest yields of 6-8%, making them attractive for buy-to-let investors seeking consistent rental income. These areas benefit from lower property acquisition costs while maintaining steady rental demand from local populations.
How much have property prices risen in the last five years in Lisbon, Porto, and the Algarve?
Portuguese property prices have experienced dramatic growth over the past five years, with increases of 30-50% across major regions, making Portugal one of Europe's fastest-appreciating property markets.
Lisbon has seen property prices surge by approximately 45-50% since 2020, with the city center experiencing the most dramatic increases. Annual growth rates have averaged 8-12% per year, driven by international buyer demand, limited supply, and Portugal's growing reputation as a lifestyle destination.
Porto has recorded slightly more moderate but still substantial growth of 35-40% over five years, with annual increases averaging 6-9%. The city's emerging tech sector, university population, and cultural attractions have sustained strong demand despite more affordable pricing compared to Lisbon.
The Algarve region has experienced growth of 30-35% over five years, with coastal properties appreciating faster than inland areas. International tourism recovery post-COVID and continued foreign investment have maintained upward pressure on prices throughout the region.
This rapid appreciation has created concerns about housing affordability for local Portuguese buyers, leading to government discussions about potential cooling measures, though no significant policy changes have been implemented as of September 2025.
It's something we develop in our Portugal property pack.
What do experts expect will happen to Portugal's housing prices over the next few years?
Property market experts forecast continued price growth of 3-5% annually through 2026, though at a more moderate pace than the dramatic increases seen over the past five years.
The International Monetary Fund projects Portugal's GDP growth at 2.35% for 2025, providing economic stability that supports continued property appreciation. Strong employment growth and wage increases are expected to sustain domestic demand despite affordability concerns.
Supply constraints remain a key factor supporting prices, with new construction struggling to meet demand in prime locations. Lisbon and Porto face particular supply shortages in central areas, where development land is limited and planning approvals take extended periods.
International buyer demand is expected to remain robust, supported by Portugal's continued appeal for lifestyle buyers, retirees, and investors seeking European Union property exposure. The end of the Golden Visa program for real estate has not significantly dampened foreign investment flows.
Potential moderating factors include European Central Bank monetary policy changes, possible government intervention to address housing affordability, and increased construction activity in secondary cities that could provide price relief in overheated markets.
It's something we develop in our Portugal property pack.
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.
Portugal's property market in September 2025 presents both opportunities and challenges for prospective buyers.
While prices have risen significantly, the market continues to offer attractive rental yields and strong appreciation potential, particularly for buyers who understand regional variations and factor in all associated costs when making investment decisions.
Sources
- Global Property Guide - Portugal Price History
- Portugal Homes - House Prices Continue to Climb
- Portugal Buyers Agent - House Prices Guide
- InvestRopa - Average House Prices Portugal
- IMin Portugal - Real Estate Guide
- InvestRopa - Lisbon Price Forecasts
- The Portugal News - Property Price Rises
- Global Citizen Solutions - Mortgages for Foreigners
- Portugal Xpert - Mortgage Guide
- Algarve Prop - Mortgage Rates Guide