Portugal property prices: are they still rising?

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

Who is the author of this content?

INVESTROPA

A team specialized in real estate investing in European countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Portugal. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At InvestRopa, we explore the Portuguese real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Lisbon, Porto, and Faro. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

Fact-checked and reviewed by our local expert

✓✓✓

João Morais 🇵🇹

Founder | Real Estate Advisor, at Wilderness Investments

João Morais is an expert in the Portuguese real estate market. With a network of trusted connections and years of experience, João ensures a seamless experience, guiding clients through every step of the buying process, from property search to contract negotiations. After speaking with him, we reviewed the blog post, made some changes, and included his experience to make it richer.

How much have average property prices in Portugal changed in the last 12 months?

Portuguese property prices experienced remarkable growth in the past 12 months, with the national average increasing by 16.92% year-on-year as of April 2025.

Bank appraisal values reached a median of €1,866 per square meter, representing one of the highest annual increases on record. The asking price average sits higher at €2,851 per square meter as of May 2025, showing a 7.4% year-on-year increase.

Both new-build and resale properties contributed to this surge, with resale properties actually outpacing new construction. Resale homes jumped 17% while new-builds rose 14.5%, both marking the highest growth rates ever recorded in Portugal's modern property market history.

This growth rate places Portugal among the fastest-appreciating property markets in the European Union, significantly outpacing neighboring Spain and most other EU countries during the same period.

It's something we develop in our Portugal property pack.

Which regions or cities in Portugal are seeing the fastest price growth right now?

Madeira leads the country with an extraordinary 24.54% price increase, followed by Setúbal at 20% and the Algarve at 18.55%.

The Norte region, which includes Porto, recorded solid growth of 13.2%, while several inland areas like Santarém, Évora, and Faro all exceeded 10% annual growth. Évora specifically showed strong performance at 13.9%, defying the typical pattern of slower inland growth.

However, the market shows significant regional variation, with some areas experiencing declines. Cities like Viseu and Castelo Branco actually saw property prices fall during this period, highlighting the importance of location selection for investors.

The coastal advantage remains clear, with most Atlantic-facing regions significantly outperforming their inland counterparts. This trend reflects continued demand from both domestic buyers seeking lifestyle improvements and international buyers attracted to Portugal's coastal amenities.

What's happening specifically in Lisbon and Porto compared to the rest of the country?

Lisbon maintains its position as Portugal's most expensive property market but shows surprisingly modest growth compared to other regions.

City	Average Price (€/m²)	Annual Growth Rate
Lisbon (Central Districts)	€6,100+	2.3-4.7%
Lisbon (Overall)	€5,720	1.8%
Porto	€1,472-€4,500	5.84-8.6%
National Average	€1,866	16.92%
Algarve	€3,334	18.55%
Madeira	Variable	24.54%
Setúbal	Variable	20%

Porto demonstrates stronger momentum with growth rates of 5.84% to 8.6%, significantly outpacing Lisbon's more moderate 1.8% to 4.7% increases. This suggests Porto offers better value appreciation potential while remaining more affordable than the capital.

The gap between the two cities continues to narrow, with Porto's accelerated growth making it an increasingly attractive alternative for both investors and residents seeking urban amenities at lower entry costs.

How do coastal areas like the Algarve compare to inland regions in terms of price trends?

Coastal regions dramatically outperform inland areas, with the Algarve leading at €3,334 per square meter and 9.3% growth driven by tourism and international retiree demand.

The coastal premium reflects Portugal's appeal as a lifestyle destination, with ocean access, tourism infrastructure, and international connectivity commanding significant price premiums. Most coastal municipalities show double-digit growth rates, particularly those with established tourism economies.

Inland regions present a mixed picture, with Alentejo remaining the most affordable at €1,098 to €1,316 per square meter but showing variable growth patterns. While some inland cities like Évora achieved strong 13.9% growth, others like Viseu and Castelo Branco experienced price declines.

The coastal-inland divide continues widening, creating opportunities for value investors willing to target emerging inland markets while understanding the inherent demand advantages coastal properties maintain.

Are new-build properties rising in price faster than existing homes?

Existing homes actually outpace new-build properties in price appreciation, with resale properties posting 17% growth compared to 14.5% for new construction.

This reversal of typical market patterns suggests strong demand for established properties with proven track records and existing neighborhood infrastructure. Buyers appear willing to pay premiums for properties in established areas rather than waiting for new developments.

New home sales volume increased 13.4% year-on-year, indicating healthy construction activity, but the price dynamics favor existing inventory. This trend benefits current property owners while creating opportunities for buyers seeking new construction at relatively better value.

The gap between new and existing property performance reflects market maturity, with buyers increasingly valuing location and established amenities over newer construction features.

How do current property prices compare with the pre-pandemic peak in 2019?

Current Portuguese property prices significantly exceed the pre-pandemic 2019 peak, with values more than doubling since 2015 and continuing upward momentum through 2024-2025.

The market experienced sharper annual growth in 2024-2025 than in the years leading up to the pandemic, suggesting accelerated appreciation rather than a simple recovery. Supply-demand imbalances and sustained foreign interest support prices well above historical norms.

Unlike many markets that saw temporary pandemic spikes followed by corrections, Portugal's price increases appear structural rather than speculative. Strong economic fundamentals, EU membership benefits, and lifestyle appeal create sustained upward pressure on property values.

This sustained growth pattern indicates a fundamental shift in Portugal's property market positioning rather than a temporary price bubble, supported by demographic trends and international mobility patterns.

What do official statistics say about the number of property transactions this year versus last year?

Official statistics show robust transaction growth, with 156,325 homes sold in 2024 representing a 14.5% year-on-year increase.

The fourth quarter of 2024 recorded the highest quarterly sales volume in three years, indicating accelerating market activity rather than slowing momentum. This transaction growth accompanies the price increases, suggesting genuine market strength rather than speculative activity.

Existing homes dominate sales activity, accounting for almost 80% of all transactions, while new-build sales increased 13.4% year-on-year. The high transaction volume validates the price growth as market-driven rather than artificial scarcity.

These statistics demonstrate a healthy, liquid market where rising prices reflect genuine demand-supply dynamics rather than reduced transaction activity inflating values.

It's something we develop in our Portugal property pack.

Are foreign buyers still driving demand, and what share of purchases do they represent?

Foreign buyers now represent approximately 5% of total purchases in early 2025, down from higher historical levels, but they continue paying significantly higher average prices.

International buyers average €376,500 per home compared to €224,800 for domestic purchasers, indicating their focus on premium properties and prime locations. While their market share has declined, their price impact remains substantial in key markets like Lisbon, Porto, and the Algarve.

Demand from EU citizens, UK nationals, and North American buyers remains strong despite policy changes like the Golden Visa amendments and Non-Habitual Resident program modifications. These buyers increasingly focus on lifestyle purchases and long-term residency rather than pure investment plays.

The shift toward domestic buyer dominance (95% of transactions) suggests a maturing market less dependent on foreign speculation, while international demand continues supporting premium price levels in desirable locations.

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 have mortgage interest rates in Portugal affected affordability in the past year?

Lower mortgage interest rates in late 2024 and early 2025 actually stimulated property demand and contributed to higher transaction volumes and prices.

The improved financing conditions made property purchases more accessible for domestic buyers, partially offsetting the impact of rising property values on affordability. However, the net effect still reduced overall affordability as price increases outpaced interest rate benefits.

First-time buyers particularly benefited from rate reductions combined with new government programs like IMT Jovem, which exempts buyers under 35 from certain transaction taxes. These policies helped maintain domestic demand despite rising prices.

While favorable interest rates supported market activity, structural supply constraints prevented these conditions from moderating price growth, creating a complex affordability landscape for different buyer segments.

What's the outlook from local real estate agencies for prices over the next 12 months?

Real estate agencies predict continued price growth for the next 12 months, though at a moderating pace compared to the exceptional growth seen in 2024-2025.

Agency forecasts point to ongoing supply shortages and robust demand, especially in Greater Lisbon, Porto, and the Algarve, as key factors supporting continued appreciation. However, they expect growth rates to moderate from current double-digit levels to more sustainable single-digit increases.

Local agents emphasize that structural supply constraints will prevent any significant price corrections in the near term. New construction activity remains insufficient to meet demand, particularly in prime urban and coastal locations.

The consensus outlook suggests selective growth, with premium locations maintaining strong appreciation while secondary markets may see more modest increases as buyers expand their geographic search for value.

Are rental yields keeping up with rising property prices in major Portuguese cities?

Rental yields are generally not keeping pace with property price increases, particularly in Lisbon and Porto, leading to yield compression in prime markets.

City/Region	Rental Yield Trend	Investment Impact
Lisbon Center	Declining yields	Focus on capital appreciation
Porto Center	Moderate compression	Better balance than Lisbon
Algarve Tourist Areas	Seasonal volatility	Short-term rental potential
Secondary Cities	Stable to improving	Emerging investment opportunity
Suburban Areas	Stable yields	Long-term rental market
University Towns	Stable demand	Student accommodation focus
Rural Areas	Higher yields, lower demand	Value investment potential

This yield compression is prompting investors to explore secondary cities and emerging neighborhoods where rental income can better support purchase prices. The shift encourages more strategic location selection rather than simply targeting the most prestigious addresses.

It's something we develop in our Portugal property pack.

What government policies or tax changes are currently influencing property demand and prices?

Several major policy changes are reshaping Portugal's property market dynamics, with both demand-stimulating and demand-moderating effects.

The Golden Visa program was amended in 2023 to exclude real estate investments, reducing one source of foreign investment demand. Simultaneously, the Non-Habitual Resident tax regime ended in January 2024, affecting tax advantages for international buyers.

Conversely, the new IMT Jovem law implemented in August 2024 exempts buyers under 35 from certain transaction taxes for first homes, potentially boosting domestic demand. This policy specifically targets young Portuguese buyers struggling with affordability.

The government launched a €2 billion public housing program and rural land reclassification initiatives aimed at increasing supply, though these measures have not yet significantly impacted the structural supply-demand imbalance driving price growth.

These policy shifts create a complex environment where reduced foreign speculation incentives compete with enhanced domestic buyer support, ultimately favoring local purchasers while maintaining overall market strength.

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.

Sources

1. Global Property Guide - Portugal Price History
2. Property Market Index - Portugal EU Growth Leader
3. Portugal Pathways - Market Growth Predictions
4. Idealista - Portugal EU Price Leadership
5. Residential Advisory Portugal - Regional Price Analysis
6. Idealista - Lisbon Luxury Market Report
7. Portugal Decoded - Record Price Surge Analysis
8. InvestRopa - Porto Price Forecasts