Lisbon's luxury property market continues its upward trajectory, becoming progressively more expensive as it solidifies its status as a key destination for international investors. The sustained influx of foreign capital is a primary driver behind the rising housing costs, cementing the Portuguese capital's position as one of Europe's luxury property hotspots.
Understanding the increase in Lisbon's luxury market
The value of luxury residential properties in the Portuguese capital saw an increase of 2.4% during the first half of 2025. This finding comes from the latest Savills World Cities Prime Residential Index, which tracks the performance of prime real estate across key global cities.
This growth further solidifies Lisbon's position as an increasingly expensive market and the most sought-after area for luxury homes in Portugal, along with Setúbal. Data from July 2025 indicates that the average price for a home in Lisbon is now over €6,100 per m2 in most central neighbourhoods, while the broader Lisbon metropolitan area averages around €5,829 per m2. The sustained rise highlights the strong and continued interest from international buyers, a key factor driving up prices in the city.
What is the forecast for Lisbon's luxury real estate market?
After a period of rapid expansion in 2023 and 2024, Lisbon's property market is showing signs of stabilisation. Forecasts for 2025 suggest a more balanced market, with overall property market growth projected between 4% and 6%.
This shift towards stability is influenced by several factors. As economic growth slows and costs increase, buyers are becoming more selective. Furthermore, a significant real estate project approved by the Lisbon City Council, set to introduce around 2,000 new homes, may help ease the tension between supply and demand.
Lisbon's top luxury neighbourhoods
Lisbon remains one of the most attractive cities for property investment in 2025, particularly in its established central luxury neighbourhoods. Areas such as Avenida da Liberdade, Lapa, Chiado and Príncipe Real remain the dominant hotspots for high-end property investment. These districts consistently attract buyers due to their premium location, historic charm, and high concentration of luxury amenities.
Lisbon's property trends in a national and global context
Lisbon's performance in the luxury real estate market stands out, especially as the price of luxury homes rises globally by an average of just 0.7% across the 30 cities tracked by Savills. This trend isn't limited to sales, as Lisbon has also been noted for having some of the fastest-rising luxury rental prices.
On a national level, Lisbon's growth is a key driver behind the trend of rising luxury house prices in Portugal, with the market expected to see a solid performance throughout 2025. The country's economic growth, which is outpacing the European Union average, continues to attract substantial foreign investment, with international buyers accounting for a significant portion of property transactions.
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