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
Where are the best places to invest in Portugal right now? Is Lisbon still the top pick, or are cities like Porto, Faro, and Braga gaining ground? What makes these locations attractive to both local and foreign investors?
We’re often asked these questions because we work directly with notaries, real estate agents, and clients who invest across the country. Our firsthand experience in these markets gives us unique insights into where the real opportunities lie. To save everyone from asking privately, we’ve written this article to share our knowledge broadly.
Our goal is to highlight the hottest markets in Portugal and explain why they’re worth your attention in 2025.
If you have suggestions or want us to dive deeper into a specific area, let us know. You shoot an email, we answer within 24 hours.
How this content was created 🔎📝
Fact-checked and reviewed by our local expert
João Morais 🇵🇹
Founder | Real Estate Advisor, at Wilderness Investments
1) Faro is booming as the Algarve's capital with rising demand for vacation rentals
Faro is buzzing as the Algarve's capital, with vacation rentals in high demand thanks to several key factors.
In 2023, Portugal hit a tourism jackpot with €25 billion in revenue, and Faro alone saw 3.5 million guests in August. This influx of tourists is not just boosting the local economy but also driving up the need for vacation rentals.
Adding to the excitement, a direct flight from New York to Faro is set to launch in 2024, making it a breeze for U.S. tourists to visit. This new connection is expected to bring even more international visitors, putting Faro firmly on the map as a must-visit destination.
The property market in Faro is also on fire, with a surge in demand for vacation homes and rentals. Real estate agents are seeing a spike in interest, thanks to the region's stunning landscapes and affordable property prices. The government's push for sustainable tourism is shaping how properties are developed, adding to the area's appeal.
Sources: Schengen News, Portugal Resident, eSales International
2) Viseu is popular for its good quality of life and affordable homes
Viseu is catching the eye of property buyers for its great quality of life and affordable housing.
In 2023 and 2024, the median house price in Viseu was €1,736 per square meter, which is quite a bargain compared to the rest of Portugal. This affordability is a big draw for those looking to move.
Viseu is often ranked as one of the best places to live in Portugal, thanks to its peaceful atmosphere and rich history. The city offers a balanced lifestyle with easy access to healthcare, education, and other essential services, making life here very comfortable.
Living in Viseu is cheaper than in bigger Portuguese cities. The cost of living index is 36.58, lower than Coimbra's 39.90. This means your money goes further here, and you can enjoy a high quality of life without breaking the bank.
Safety is another big plus for Viseu, with a high safety index of 85.35. This makes it a secure and affordable place to call home, perfect for families and retirees alike.
With its combination of low property prices, a lower cost of living, and a safe environment, Viseu is becoming a top choice for those looking to settle in Portugal.
Sources: Portugal Housing Prices, Quality of Life Comparison, Viseu as the Best Place to Live
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.
3) Matosinhos is booming with its proximity to Porto and fast-rising property prices
Matosinhos is catching eyes because it's close to Porto and property values are rising fast.
In 2023, the average asking price for properties in Matosinhos was €3,547, which was quite a bit lower than Porto's €4,296. This made Matosinhos a more affordable choice for buyers. By 2024, the median apartment price in Matosinhos jumped to €4,461/m², showing a steady climb in property values. This trend is likely to keep going, thanks to the area's great location and growing infrastructure.
Being so close to Porto, Matosinhos has seen a big boost in housing demand. The city offers a lovely lifestyle with its beautiful beaches, riverside restaurants, and plenty of recreational activities. This makes it a hot spot for both local and foreign buyers. In 2023, rental yields in Matosinhos were at 6.1 percent, making it a profitable venture for property investors, especially those eyeing buy-to-let opportunities.
Matosinhos is also becoming a popular investment hotspot due to its affordable property prices and high rental yields. The transformation of the former Galp Energia refinery into a green and innovative eco-district is expected to draw in new residents and businesses, boosting the area's appeal even more.
Sources: Portugal Buyers Agent, Portugal Buyers Agent, Lola Land
In this video, we can see that Matosinhos is highlighted as a thriving coastal suburb of Porto, featuring beautiful beaches and excellent amenities, making it a hot real estate market.
4) Cascais is gaining attention for its luxury real estate and high appreciation potential
Cascais is a prime destination for luxury real estate, attracting upscale property buyers from around the world.
In 2023, property prices in Cascais averaged €5,835 per square meter, with hotspots like Estoril commanding even higher rates. This upward trend is expected to continue, making Cascais a promising investment for those eyeing property appreciation.
International buyers are flocking to Cascais, drawn by impressive rental yields averaging 5.6 percent. The town's reputation as a luxury hub is bolstered by celebrity homeowners like Cristiano Ronaldo, adding to its allure. Whether you're into modern apartments or beachfront villas, Cascais offers a diverse range of properties to suit various tastes.
Foreign investment is pouring into Cascais, thanks to expats who appreciate the area's modern amenities, excellent healthcare, and international schools. The Portuguese government's favorable tax incentives, like the Non-Habitual Residency scheme, are attracting high-net-worth individuals, further boosting the market.
New luxury residential projects and mixed-use developments are popping up, promising to enhance Cascais's appeal even more. This ongoing development is set to drive further growth in the luxury real estate market, making it an exciting time to invest.
Sources: Cascais Portugal Real Estate, Real Estate Investment Cascais, Portugal, The Unstoppable Growth of Portugal's Luxury Real Estate Market
5) Évora is gaining attention for its historical charm and booming tourism rental market
Évora is catching eyes for its historical charm and booming tourism-driven rental market.
In recent years, Évora has seen a steady rise in property prices, drawing interest from both local and foreign buyers. This trend is likely to continue, making it a hot spot for real estate investment. The city's allure is not just in its history but also in its potential for growth, especially as more people discover its unique appeal.
Tourism in Évora is on the upswing, with nearly 700,000 overnight stays recorded in 2023. This surge is part of a broader trend in Portugal, where cities are starting to introduce tourist fees to handle the growing number of visitors. Such measures highlight Évora's increasing popularity as a travel destination, attracting more investors looking to capitalize on the tourism boom.
Local accommodations are thriving, with Évora boasting a bed occupancy net rate of 49.5 percent in 2023. This high demand is fueled by the expansion of short-term rental platforms like Airbnb, which are flourishing in this vibrant tourist hub. The city's ability to draw tourists consistently makes it an attractive option for property buyers looking for rental income.
Évora's charm is not just in its ancient streets and architecture but also in its modern-day vibrancy. The city's growing tourism sector is a testament to its appeal, offering a blend of history and contemporary attractions that keep visitors coming back. This dynamic environment is a key factor in the rising interest from property investors.
As Évora continues to grow in popularity, the real estate market is expected to remain strong. The combination of historical allure and a thriving tourism industry makes it a compelling choice for those looking to invest in Portugal. With the city's ongoing development and increasing visitor numbers, the potential for property value appreciation is significant.
Sources: Schengen News, Portugal Buyers Agent, Statista
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6) Leiria is attracting interest as a commuter town with affordable homes near Lisbon
Leiria is gaining traction as a commuter town thanks to its affordable housing and proximity to Lisbon.
While housing prices in Lisbon have skyrocketed, increasing by 120% from 2012 to 2022, Leiria offers a more budget-friendly alternative. This makes it an appealing choice for those who want to live near the capital without breaking the bank.
Getting to Lisbon from Leiria is a breeze now. With frequent bus services like Rede Expressos, FlixBus, and ALSA, commuting has never been easier. Plus, improved infrastructure, including motorways and the Linha do Oeste railway line, means you can zip to Lisbon for work without a hitch.
Leiria isn't just about easy commutes; it's also buzzing with new developments. Projects like the Leiria Innovation Hub and the Monte Redondo Business Park are turning heads. These initiatives are not only attracting new residents but also creating a vibrant business scene, boosting the city's socio-economic landscape.
The local government is all in on economic growth, backing projects that make Leiria even more appealing. This commitment is a big reason why the city is becoming a hotspot for both living and working.
With its affordable housing, improved connectivity, and dynamic development projects, Leiria is quickly becoming a top choice for those looking to balance city life with a more relaxed lifestyle.
Sources: World Economic Forum, Busbud, Leiria Economia
7) Braga is gaining interest for its low property prices and high rental yields
Braga is quickly becoming a hotspot for investors due to its affordable property prices and attractive rental yields.
In 2023 and 2024, the average property price in Braga was €1,520 per square meter, making it much cheaper than Lisbon and other major cities in Portugal. This affordability is a big draw for investors who want to enter the market without spending a fortune. Imagine getting a charming property in a vibrant city without the hefty price tag of Lisbon.
On the rental front, Braga offers solid returns. The average rental yield was 5.37%, which is slightly below the national average but still a strong return on investment. Rental prices have been climbing, with apartment rentals increasing by 30% year on year, reaching an average of €9 per square meter. This shows a healthy rental market, giving investors a chance for steady income.
Braga's economy is thriving, adding to its appeal. The city boasts a diverse economy with a strong base in manufacturing and a growing tech and innovation sector. This economic growth attracts professionals from various fields, boosting demand for rental properties and supporting the rental market's expansion.
Braga's charm isn't just in numbers; it's in the lifestyle it offers. The city combines historical allure with modern amenities, making it a desirable place to live. This blend of old and new attracts both locals and expats, further driving the rental market.
Investors are noticing Braga's potential, and the city's combination of low property prices and high rental yields is hard to ignore. With its economic growth and rising rental demand, Braga is positioning itself as a prime investment destination.
Sources: Benoit Properties, Portugal Buyer's Agent, Numbeo
This video illustrates Braga's appeal as a top investment destination, ranking in the top 10 European cities for quality of life and boasting 94% resident satisfaction.
8) Setúbal is gaining interest as a cheaper alternative to Lisbon with strong rental demand
Setúbal is quickly becoming a hot spot for those seeking more affordable property options outside of Lisbon.
With property prices in Lisbon on the rise, many buyers are turning to Setúbal for its significantly lower house prices in 2024. This makes it an attractive choice for real estate investment. The charm of Setúbal lies not just in its affordability but also in its potential for growth.
Investors are particularly drawn to Setúbal due to its higher rental yields. In 2024, the average rental yield here was 7.04%, outpacing other major cities like Porto and the Algarve. This makes Setúbal a prime market for those interested in rental properties. The growing tourism industry, fueled by Setúbal's natural beauty and proximity to Lisbon, further boosts demand for short-term rentals.
Infrastructure improvements have also contributed to Setúbal's appeal. Enhanced transportation links have made it easier to travel between Setúbal and Lisbon, increasing accessibility for both tourists and investors. Local government initiatives, such as encouraging property refurbishment and development, have further solidified Setúbal's position as an attractive investment destination.
Setúbal's allure is not just about numbers; it's about lifestyle. The region offers a unique blend of coastal charm and urban convenience, making it a desirable place to live and invest. The local culture, vibrant markets, and stunning landscapes add to its appeal, drawing in both tourists and long-term residents.
As more people discover Setúbal, the demand for properties is expected to rise, making now an opportune time to invest. The combination of affordability, high rental yields, and a growing tourism sector positions Setúbal as a promising alternative to Lisbon.
Sources: Benoit Properties, The Portugal News, Global Property Guide
Our team found this video showcasing Setúbal's emergence as an affordable alternative to Lisbon, offering spacious T2 apartments near the water for around €700 per month.
9) Funchal in Madeira is gaining attention for its mild climate and expanding expat community
Funchal in Madeira is catching the eye of many potential property buyers.
One big draw is its mild climate, offering a pleasant, spring-like atmosphere all year round. With temperatures hovering between 17°C and 25°C, it's easy to see why people are attracted to this island paradise. Imagine enjoying outdoor activities without the extremes of hot summers or cold winters.
Funchal's charm doesn't stop at the weather. The city is seeing a growing expat community, with thousands of new residents moving in each year. They're lured by the island's excellent healthcare, strong infrastructure, and safe environment. This influx has sparked the development of new international schools and services, making it even more appealing for families.
The real estate market is buzzing with activity. Property prices in Funchal are on the rise, with the average price per square meter now at €3,389. This is higher than in other parts of Madeira, reflecting the increased demand. Foreign investors are also taking note, further boosting the island's allure.
For those considering a move, Funchal offers a unique blend of natural beauty and modern conveniences. The combination of a welcoming community and a stable environment makes it a top choice for many. Whether you're looking for a vacation home or a permanent residence, Funchal has something to offer.
Sources: MCS.pt, Digital Emigre, Statista
In this video, we can see that property prices in Funchal have risen significantly, with studios starting at €320,000 and 3-bedroom apartments reaching €1 million, confirming increased interest in its property market.
10) Viana do Castelo is gaining interest for its scenic coastal homes and potential price growth
Viana do Castelo is catching eyes for its stunning coastal properties and potential for price growth.
In 2024, the median price for an apartment here was €2,428 per square meter, while houses were at €1,419 per square meter. This slight uptick from the previous year shows a growing interest, even though prices dipped a bit in 2023.
Portugal's booming tourism and beautiful coastlines are driving up demand for coastal properties, and Viana do Castelo is no exception. The city is seeing significant economic development, with new railways and motorways making it a hot spot in the real estate market.
Viana do Castelo's charm is undeniable, with its Sea Centre, nautical sector, and the stunning littoral Geo-park. These features make it a magnet for tourists, boosting its reputation and attracting international buyers.
Investors are particularly drawn to the city's thriving tourism sector, which enhances its economic potential and appeal. The combination of natural beauty and economic growth is hard to resist.
Sources: ArKadia, URBACT, Properstar
11) Aveiro is gaining interest for its unique canals and rising student housing demand
Aveiro is quickly becoming a hot spot for property buyers.
One reason is the rising property prices, which show how much demand is growing. This isn't just a fluke; it's tied to the booming local economy and tourism. Investors are taking note because these factors make Aveiro a promising place to put their money.
The University of Aveiro is a big player in this scene. With a large number of students enrolling each year, there's a constant need for more student housing. This demand has led to higher rental yields, which is music to investors' ears. New projects are popping up to cater to this need, making the area even more appealing.
Aveiro's charm doesn't stop at its educational institutions. The city is famous for its unique canals and stunning scenery, often featured in media stories. This picturesque setting draws in tourists and potential residents alike, boosting its allure.
Tourism is booming, with a record 446,972 overnight stays in 2023. This surge in visitors highlights Aveiro's growing popularity as a destination.
Sources: The Portugal News, Brint Portugal, EduRank
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12) Guimarães is gaining attention for its UNESCO status, driving up property values and tourism
Guimarães is experiencing a remarkable transformation since its UNESCO World Heritage status was extended in 2023.
This prestigious recognition has not only elevated the city's profile but also led to a significant rise in property values. Investors are flocking to Guimarães, drawn by its enhanced cultural and historical allure. The city's medieval charm, with its well-preserved architecture, is a magnet for those looking to invest in a place rich with history.
Tourism in Guimarães is booming, with a surge in visitor numbers eager to explore its historic center and the Couros Zone. The international spotlight, thanks to increased media coverage, has put Guimarães on the map as a must-visit destination. This influx of tourists is not just a seasonal trend; it's a growing wave that shows no signs of slowing down.
Local businesses are thriving, especially in the hospitality and tourism sectors. New hotels, restaurants, and tour operators are popping up to cater to the ever-growing number of tourists. This boom is creating jobs and giving the local economy a much-needed boost. The local government is actively supporting this growth, promoting Guimarães as a top tourist spot.
With its UNESCO status, Guimarães is not just preserving its past but also paving the way for a prosperous future. The city's unique blend of history and modernity is a compelling draw for both tourists and investors. As Guimarães continues to grow, it offers a unique opportunity for those looking to invest in a city that is both historically significant and economically vibrant.
Sources: Idealista, ITB News, World Heritage Site, Evora 2027
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.