Luxury homes on the Portuguese Islands: Madeira and São Miguel lead the market

The market for premium homes on the Portuguese islands is exclusive by nature, with availability limited in both property type and location, according to new data from idealista.

The islands of Portugal offer a lifestyle unlike anywhere else — lush landscapes, the Atlantic on the doorstep and a climate that is mild year-round. It’s little wonder that both Portuguese and international buyers are looking to secure a home in Madeira or the Azores. Yet those searching for luxury properties will find the market highly concentrated, with the vast majority of options located on Madeira and São Miguel.

Portuguese buyers still account for over half of all demand, drawn by the islands’ natural beauty and exceptional quality of life. However, international interest continues to rise, especially across the Azores.

All nine islands of the Azorean archipelago recorded international demand above 40% for homes on the market during the third quarter of 2025, according to idealista/data. On Corvo, Pico, Santa Maria and Flores, foreign interest even surpassed domestic demand, reaching over 50%. Most international searches originate from the USA, Germany and Canada.

Madeira also attracts considerable attention from abroad, with overseas demand representing around 47% of searches in summer 2025. Porto Santo, in contrast, sees a more modest share at around 26%. In the Madeira region, the strongest international interest comes from Germany, the UK and the USA.

Where are luxury homes most concentrated?

For families and investors seeking luxury homes priced above €1 million, the market across the Portuguese islands remains selective and centred on a small number of locations.

Luxury apartments are particularly rare. Madeira is the only island offering a meaningful selection, with around 370 premium units available at an average price of €1.58 million. São Miguel lists just five luxury flats, with a median price of €1.35 million. No other island currently offers apartments in this segment.

As a result, the market is dominated by luxury houses, which account for more than 1,300 listings. Yet 98% of these are found on just two islands:

• Madeira: approximately 1,200 luxury houses on the market — a 49% increase compared with the previous year. This rise appears to have eased competition, with demand cooling by 30%. Median prices softened slightly (-3%), settling at €1.82 million at the end of September.
• São Miguel: 89 luxury houses listed in summer 2025, up 78% year-on-year. Increased supply has tempered demand (-45%), though median prices have climbed by 10% to around €1.5 million, suggesting that more high-end homes are entering the market.

On the remaining Azorean islands, as well as Porto Santo, luxury inventory is minimal — often fewer than 10 homes available — making these markets too small to reflect wider trends.