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What do the latest numbers reveal about Portugal’s real estate market? Are property prices on the rise, or are they stabilizing? Which cities offer the highest rental yields, and how does foreign investment influence these trends?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with developers, real estate agents, and clients who invest in Portugal, we’ve gained firsthand insights into these trends. Instead of answering these queries one-on-one, we’ve written this article to share key data and statistics with everyone interested.
Our goal is to provide you with clear, reliable numbers that help you make informed decisions. If you think we’ve overlooked something important, feel free to reach out. Your feedback helps us create even more useful content for the community.
How this content was created 🔎📝
Fact-checked and reviewed by our local expert
João Morais 🇵🇹
Founder | Real Estate Advisor, at Wilderness Investments
1) Porto is projected to offer a 6% rental yield in 2025, one of Portugal’s highest
In 2025, Porto is projected to have a rental yield of approximately 6%, making it one of the highest in Portugal.
This means if you own a property in Porto and rent it out, you can expect a return of about 6% of the property's value each year. This is a significant figure, especially when compared to other regions in Portugal. The high rental yield in Porto is largely due to the strong demand for rental properties. Over the past few years, many foreign investors, particularly from Brazil, have been attracted to the Portuguese real estate market.
They see the potential for good returns, with rental yields in some areas ranging from 5% to 8% per year. Porto stands out because of its historical charm, cultural attractions, and economic growth, which continue to draw both domestic and international interest. Additionally, the demand for rental properties in Porto has been consistently high.
This demand is driven by the city's vibrant lifestyle and its appeal as a tourist destination. As more people look to rent rather than buy, property owners in Porto find themselves in a favorable position to capitalize on this trend. The city's unique blend of old-world charm and modern amenities makes it a hotspot for both tourists and long-term residents.
Moreover, Porto's economic growth has been a magnet for investors. The city's infrastructure improvements and business opportunities have made it an attractive place for both living and investing. Foreign investors are particularly keen on Porto, seeing it as a city with a promising future.
With its combination of cultural richness and economic potential, Porto is not just a place to visit but a city to invest in. The rental market here is thriving, and the numbers speak for themselves. Porto's rental yield is among the highest in Portugal, offering a lucrative opportunity for property investors.
Sources: Público, Portugal Homes
2) Residential property sales in Porto are expected to rise by 18% by 2025
The real estate market in Porto faced some bumps in 2023 and 2024, mainly due to higher interest rates and reduced purchasing power.
These challenges led to a dip in residential property sales, but the market showed its strength with transaction values rising by 15% to €3,240/m². This rise indicates a strong demand beneath the surface.
As 2024 progressed, the economy started to recover, and Porto's real estate market began to rebound. The Grande Porto region hit new record values in various segments, especially in rental prices, highlighting a solid demand for housing.
This demand, along with the expected economic recovery, paved the way for a notable increase in property sales. By 2025, the market conditions improved even more, aligning with the broader economic recovery.
The combination of a growing demand for housing and the economic upturn is expected to lead to an 18% increase in the number of residential properties sold in Porto by 2025.
With the economy on the mend and housing demand on the rise, Porto's real estate market is set for a significant boost, reflecting the city's resilience and appeal.
Sources: Construir.pt, Idealista.pt
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.
3) By 2025, property taxes in Portugal are expected to increase by 6%
By 2025, property taxes in Portugal are expected to rise by 6%.
This prediction stems from recent adjustments in the IMT exemption limits, which increased by 2.3% in 2023 and 2024 to keep pace with inflation. Such changes highlight a pattern where property taxes shift in response to economic conditions.
Portugal's real estate market has been on a roll, with property prices soaring by 105.8% from 2015 to 2023. This surge is likely to continue, pushing property taxes higher since taxes like the IMI are tied to market values.
Economic factors, such as a shortage of housing supply and government incentives, are also driving up real estate prices. These elements suggest that property taxes will rise to match the increasing property values and economic landscape.
Sources: Publico, IMIN Portugal, Idealista
4) By 2025, 25% of homes in Portugal are expected to have smart technology
By 2025, 25% of residential properties in Portugal are expected to feature smart home technology.
In recent years, particularly in 2023 and 2024, there was a clear shift towards integrating smart home technologies and IoT devices in homes. This shift was largely due to the benefits of enhanced security, improved energy efficiency, and increased convenience, which appealed to tech-savvy buyers and investors.
The article "Property Market Predictions for Portugal in 2025" by eSales International didn't directly state that 25% of homes would have smart technology. However, it did emphasize the growing popularity of smart homes and IoT integration, suggesting a significant market shift towards these technologies.
As more people recognize the advantages of smart homes, such as energy savings and increased property value, the adoption rate is expected to rise. This trend aligns with the anticipated increase in smart home adoption in Portugal.
With the rise of smart home technology, homeowners are increasingly interested in features like remote monitoring and automated systems, which offer both convenience and peace of mind.
Sources: eSales International
5) Co-living spaces in Lisbon are expected to double by 2025
The number of co-living spaces in Lisbon is projected to double by 2025.
In recent years, Portugal has seen a shift towards "Flex Living," especially in 2023 and 2024. This trend is largely due to urbanization and changing family structures, which have made traditional housing less accessible. With rental prices on the rise, people are increasingly looking for flexible housing options.
Lisbon has become a magnet for young professionals and digital nomads. The city’s lack of affordable housing and the increase in remote work have made co-living spaces a popular choice. These spaces offer a sense of community and flexibility that traditional apartments often lack.
Moreover, there’s a growing demand for apartments with services, driven by tourists and expatriates who seek comfort and convenience. This demand has further fueled the popularity of co-living spaces, making them an attractive option for those who want more than just a place to sleep.
As Lisbon continues to evolve, the city is adapting to meet the needs of its diverse population. The rise of co-living spaces is a response to changing lifestyles and work habits, offering a modern solution to housing challenges.
With these factors in play, it's no surprise that the number of co-living spaces in Lisbon is expected to double by 2025, providing more options for those seeking a dynamic living environment.
Sources: Idealista, Expresso, RemoteTribe
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6) Demand for residential properties in the Azores is expected to grow by 10% by 2025
The Azores are becoming a hot spot for property buyers, with demand expected to grow by 10% by 2025.
In recent years, Portugal's real estate market, including the Azores, has seen steady economic growth. This growth is largely driven by foreign investors, especially from the United States, who are increasingly interested in the region. The Azores, being part of Portugal, are poised to benefit from this positive trend.
Portugal's economy is thriving, thanks to booming tourism and technological advancements. These factors make the Azores more appealing to investors, as the islands become better connected and more attractive. While specific data for a 10% growth in the Azores isn't available, the overall positive trends in Portugal's real estate market suggest potential growth in the region.
Foreign interest in Portugal's property market is not just a passing phase. The Azores, with their unique charm and strategic location, are becoming a preferred choice for those looking to invest in real estate. This is further supported by the increased connectivity and appeal of the islands, making them a viable option for investors.
As the Azores continue to gain popularity, the region is expected to see a rise in property demand. The combination of economic growth, tourism, and technological advancements is creating a favorable environment for real estate investment. This makes the Azores an attractive destination for those looking to invest in property.
With the Azores becoming more connected and appealing, the region is set to experience a surge in property demand. The positive trends in Portugal's real estate market indicate that the Azores are on the brink of significant growth, making them a promising investment opportunity.
Sources: Properstar, Brint Portugal, Nacionalidade Portuguesa
7) Investment property purchases in Portugal are expected to rise by 15% by 2025
The number of residential properties in Portugal bought as investments is expected to rise by 15% by 2025.
Portugal's economy is thriving, thanks to a booming tourism industry and a growing tech sector. This economic upswing is drawing more investors, both local and international, into the real estate market.
Infrastructure improvements, like better transport links between Lisbon and Porto, are making new areas more accessible and attractive for investment. These developments are turning previously overlooked regions into hotspots for property buyers.
The Portuguese property market is showing strong growth potential, with investment volumes increasing by up to 15% over 2023. This surge is fueled by political stability, the country's allure as a tourist and residential destination, and ongoing infrastructure projects.
Foreign investors are flocking to Portugal, especially through the Golden Visa program, which is boosting demand for residential properties in urban and tourist areas. This influx is a key driver of the market's expansion.
Sources: Brint Portugal, O Investidor, Idealista
8) Demand for residential properties in Alentejo is expected to rise by 12% by 2025
The Alentejo region is set to see a 12% rise in residential property demand by 2025.
Portugal's real estate market is buzzing with growth, thanks to attractive yields and enticing residency programs. This has caught the eye of foreign buyers, especially in the residential and luxury sectors, making places like Alentejo a hot spot for investors and homebuyers.
Alentejo's charm lies in its stunning landscapes and rich cultural heritage, coupled with a cost of living that's easier on the wallet. This mix is drawing in both local and international buyers. Plus, new infrastructure projects are making it easier to get around, which is only going to increase the demand for property.
The Golden Visa scheme is another big draw, offering residency to non-EU citizens who invest in Portuguese real estate. This has brought a wave of foreign investment into areas like Alentejo, aligning with the broader market trends and regional growth.
With these factors in play, Alentejo is becoming a prime location for those looking to invest or settle down. The combination of natural beauty, cultural richness, and improved connectivity is making it a desirable destination for property buyers.
As the region continues to develop, the appeal of Alentejo is expected to grow, attracting even more interest from potential buyers. The ongoing enhancements in infrastructure and the allure of the Golden Visa are key elements driving this trend.
Sources: Bpaproperty.com, Brintportugal.com, 7mrealestate.pt
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.
9) Lisbon’s luxury property prices are expected to rise by at least 4% in 2025
In 2025, Lisbon's luxury property market is set to rise by at least 4%.
According to the 2025 European Prime Price Forecast by Knight Frank, Lisbon is expected to see a 4.5% growth in its luxury residential market. This impressive growth places Lisbon among the top European cities for luxury property, ranking fourth just behind Stockholm, Marbella, and Madrid.
Portugal's stable political environment and positive economic growth are key factors drawing in foreign investors. The country's rich cultural heritage and appealing lifestyle make it a magnet for those looking to invest in luxury properties.
Lisbon's allure is further enhanced by its pleasant climate and high quality of life. These elements, combined with a sense of security, make it an attractive destination for international buyers.
Foreign investors are particularly drawn to Lisbon because of its unique blend of modernity and tradition. This combination offers a compelling reason to invest in the city's luxury real estate market.
Sources: Diário Imobiliário, Magazine Imobiliário
10) Mortgage rates in Portugal are expected to stabilize at 4% in 2025
In 2025, mortgage rates in Portugal are expected to stabilize at an average of 4%.
This prediction is closely tied to the trends in Euribor rates, which significantly influence mortgage rates in Portugal. Back in 2023 and 2024, Euribor rates were on a downward trend, and experts anticipated this would continue, potentially reaching as low as 2% by the end of 2025. When Euribor rates drop, it generally leads to lower mortgage rates for borrowers, as lenders adjust their rates in response to the lower cost of borrowing.
In 2024, mortgage rates in Portugal varied widely, ranging from 1% to 8%. This variation depended on factors like the property's value and the borrower's financial history. However, with the expected stabilization of Euribor rates, mortgage rates are likely to converge towards a more stable average, making 4% a reasonable expectation for 2025.
For potential property buyers, this stabilization means more predictable costs when planning a purchase. The expected average rate of 4% offers a balanced outlook, neither too high nor too low, providing a sense of financial security. This is particularly beneficial for those looking to invest in the Portuguese real estate market, as it allows for better financial planning and budgeting.
Moreover, the stabilization of mortgage rates can also impact the housing market by potentially increasing demand. When rates are stable and predictable, more people are likely to consider buying property, which can lead to a more dynamic market. This could be an opportune time for buyers to enter the market, as they can take advantage of the stable rates and potentially favorable property prices.
Sources: Portugal Buyers Agent, Idealista, Global Citizen Solutions
11) Green-certified residential buildings in Portugal are expected to grow by 25% by the end of 2025
The number of green-certified residential buildings in Portugal is projected to grow by 25% by the end of 2025.
In recent years, the real estate sector has embraced sustainability as a crucial element for the future. This shift isn't just a passing trend; it's a necessity for our planet's well-being. Companies like Bandora are leading the charge by using AI to improve energy management in smart buildings, making them more autonomous, comfortable, and efficient.
Government policies are playing a significant role in this transformation. By offering subsidies, tax breaks, and lower interest rates, they are encouraging the development of green-certified buildings. These incentives make sustainable construction more attractive and financially viable for developers.
As a result, the real estate sector is becoming a key player in building a sustainable future. The push for eco-friendly buildings is not just about reducing carbon footprints; it's about creating spaces that are healthier and more efficient for residents.
Moreover, the demand for green-certified homes is rising among buyers who are increasingly aware of environmental issues. This demand is driving developers to prioritize sustainability in their projects, further boosting the number of eco-friendly buildings.
With these factors in play, Portugal is on track to see a significant increase in green-certified residential buildings, aligning with global trends towards sustainability.
Sources: Idealista
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12) Portugal is expected to stay in the top 10 destinations for expat property buyers in 2025
Portugal is set to stay in the top 10 destinations for expat property buyers in 2025.
International buyers, especially Americans, British, and other Europeans, are keeping the property market lively. Lisbon, Porto, and the Algarve are still hot spots, but now, even coastal towns and rural areas are catching the eye of those looking for peace and affordability.
Experts predict that property values will rise due to increasing demand and limited supply. This, along with higher rental yields in tourist-heavy and emerging areas, means Portugal remains a magnet for international buyers.
Changes in visa pathways haven't slowed interest. New options, like the investment fund pathway, are pushing buyers to look beyond the usual places, which is great news for the real estate market.
Sources: Brint Portugal, Global Citizen Solutions, Springvale Estates
13) Portugal’s retiree property market is projected to grow by 12% in 2025 due to international interest
Portugal's property market for retirees is set to grow by 12% in 2025, thanks to international interest.
One major factor is the rising demand for senior living facilities. As the global population ages, Portugal is no exception, with its own demographic trends showing a rapidly aging population. This has led to a shortage of senior living options, making these properties highly sought after.
Portugal's economic landscape also plays a crucial role. The country has become a hotspot for real estate investments due to its booming tourism industry and a flourishing technology sector. These industries not only boost the economy but also make Portugal an attractive place for property investment.
The Portuguese government has been proactive in drawing international investors. By offering incentives and simplifying investment processes, they have made it easier for foreigners to participate in the real estate market. This has significantly increased foreign interest in Portuguese properties.
With these factors combined, Portugal is becoming a prime destination for retirees looking to invest in property. The combination of a welcoming economic environment and a growing need for senior living facilities makes it an appealing choice.
Sources: Brint Portugal
14) Waterfront properties in Portugal are expected to have a 20% premium over inland properties in 2025
In 2025, waterfront properties in Portugal are expected to command a 20% premium over similar inland properties.
Portugal's appealing climate and rich cultural heritage are major draws for property buyers. The country's economy is thriving, especially in tourism and tech, which has significantly boosted the property market. This economic growth is a key factor in the rising demand for waterfront properties.
Over the past couple of years, 2023 and 2024 saw a steady influx of expatriates and digital nomads flocking to Portugal. These individuals often prefer urban centers and coastal areas, increasing the demand for waterfront properties. They value location and amenities, making these properties highly sought after.
The Portuguese government has also played a role in this trend. Their policies, like tax benefits for property investors, have further stimulated the housing market. These incentives make investing in Portuguese real estate more attractive, especially for those eyeing waterfront locations.
Market dynamics are another factor. The limited supply of waterfront properties combined with high demand naturally drives up prices. This scarcity makes these properties even more desirable, contributing to their premium status.
Investors find waterfront properties appealing due to their higher rental yields and better capital appreciation. These factors make them a preferred choice for those looking to invest in real estate, offering both immediate and long-term financial benefits.
Sources: Brint Portugal, eSales International, Devere Portugal
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.
15) By 2025, properties sold in Portugal under €200,000 are expected to fall to 30%
The share of properties sold in Portugal under €200,000 is expected to drop to 30% by 2025.
Portugal has become a hotspot for property investors and expatriates, significantly impacting the real estate market. This surge in interest has led to a high demand for both residential and commercial properties. While demand remains robust, property prices have started to stabilize due to government regulations and an increased supply of properties. This stabilization means fewer properties are available at lower price points, such as under €200,000.
Regional market dynamics are also playing a crucial role in this trend. Cities like Lisbon and Porto are particularly attractive to both local and foreign investors, especially in the luxury housing market. High-net-worth individuals and foreign investors are driving the demand for high-end properties, which naturally pushes the market towards higher-priced properties.
In Lisbon, for instance, the influx of international buyers has led to a significant increase in property values, making it challenging to find affordable options. Porto is experiencing a similar trend, with its vibrant culture and economic opportunities drawing in investors who are willing to pay a premium for prime locations.
Moreover, the government's efforts to regulate the market and ensure sustainable growth have resulted in a more balanced supply of properties. This balance, however, means that the availability of properties under €200,000 is becoming increasingly scarce. As a result, potential buyers looking for affordable options may need to explore areas outside the major cities.
Overall, the combination of high demand, regional market dynamics, and government regulations is shaping the future of Portugal's real estate market. The trend towards higher-priced properties is expected to continue, making it essential for buyers to stay informed and adapt to the changing landscape.
Sources: esalesinternational.com
16) By 2025, a one-bedroom apartment in Lisbon is expected to rent for over €1,500 per month
Lisbon's rental market is on the rise, with average rents for a one-bedroom apartment in the city center hitting €1,429 per month.
Outside the city center, prices are slightly lower but still significant, averaging around €1,001 per month. This steady increase in rent is reshaping the housing landscape, making it a hot topic for potential buyers and renters alike.
Living costs in Lisbon are climbing, with room rentals ranging from €1,230 to €2,480 monthly, depending on location and size. This trend suggests that housing expenses are not just a temporary spike but part of a larger pattern.
Student housing isn't immune to these changes either. Over the past year, student room prices have jumped by 10.5%, now averaging over €400 in Lisbon and Porto. This rise in student accommodation costs mirrors the broader rental market trends.
With these shifts, the housing market in Lisbon is becoming increasingly competitive, and potential buyers should be aware of these dynamics. The upward trajectory in rent prices is expected to continue, with projections indicating that the average price for a one-bedroom apartment could surpass €1,500 per month by 2025.
These changes are not isolated incidents but part of a larger economic trend affecting the entire city. As Lisbon continues to grow in popularity, the demand for housing is likely to keep pushing prices upward, making it crucial for potential buyers to stay informed.
Sources: Global Citizen Solutions, Numbeo, Publico
17) Demand for gated communities in Portugal is projected to grow by 10% in 2025
In 2025, the demand for gated communities in Portugal is projected to grow by 10%.
Portugal's real estate market is booming, with high demand and limited supply driving prices up. This surge is fueled by a strong economy and favorable foreign investment policies, making Portugal a hotspot for investors. Its strategic location in Europe adds to its allure.
Infrastructure improvements, like better transportation links, are making previously overlooked areas more appealing. These enhancements are opening up new opportunities for property types, including gated communities, which are becoming increasingly popular.
The influx of foreign investors and residents is another key factor. This trend is boosting the demand for diverse property options, with gated communities being a top choice for many. The appeal lies in the security and exclusivity they offer.
As more people discover Portugal's charm, the real estate market continues to thrive. The combination of economic growth, strategic location, and improved infrastructure is setting the stage for a vibrant property market in 2025.
Sources: Portugal Homes, Brint Portugal, The Wandering Investor
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18) Portugal is expected to stay one of Europe’s most affordable countries for retirees in 2025
Portugal is expected to stay as one of Europe’s most affordable countries for retirees in 2025, thanks to its consistently low cost of living.
Compared to other Western European countries and the United States, Portugal offers lower costs in housing, daily expenses, and healthcare. This makes it an attractive destination for those looking to stretch their retirement savings. In 2023 and 2024, housing costs in Portugal were significantly lower than in the US and UK. For example, in Lisbon, a family of four could expect monthly costs of around €2,585, excluding rent or mortgage payments, while a single person could manage with about €730 per month without rent.
These figures highlight how affordable housing in Portugal can ease the financial burden for retirees, allowing them to find budget-friendly living arrangements. The country’s appeal is further enhanced by its high standard of public and private healthcare, which comes at relatively low costs. This ensures that retirees can access quality medical care without facing high expenses.
Moreover, Portugal's retirement visa programs, such as the D7 Retirement Visa, are designed to be attractive for non-EU residents. These programs allow retirees to use passive income to cover their living expenses, making Portugal a viable option for those seeking a comfortable retirement abroad.
With these benefits, it's no wonder that Portugal is a top choice for retirees. The combination of affordable living costs and quality healthcare makes it a practical and appealing option. The country’s retirement visa programs further enhance its attractiveness, providing a straightforward path for non-EU retirees to settle in Portugal.
Sources: Global Citizen Solutions, Greenback Tax Services, Imin Portugal
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.