The premium real estate market in Portugal rebounded strongly in 2025, continuing to attract significant interest from foreign investors. In the second quarter alone, transactions rose by 15.5%, with the total volume traded by households surpassing €8.9 billion. House prices maintained their upward trajectory, recording a year-on-year increase of 17.7% in the third quarter.
These figures come from the Market Report Portugal 2025–2026 study by Engel & Völkers (E&V), produced in collaboration with the Marketing Research Institute. The report examines the performance of the real estate market through transactions brokered by the brand across the Portuguese regions in which it operates.
According to the agency, Portugal’s economic growth of 1.9% — underpinned by a resilient labour market and sustained domestic demand — has strengthened confidence among both families and investors, further supporting activity in the real estate sector.
The "gap" in regional prices is widening
The differences between regions in terms of average price per square metre became increasingly clear throughout 2025:
Region | Average price (€ per m²) |
|---|---|
Braga | €1,704 |
Portimão | €2,619 |
Tavira | €2,997 |
Setúbal | €3,115 |
Faro | €3,115 |
Lisbon | €3,215 |
Porto | €4,284 |
Comporta | €4,265 |
Lagos | €4,500 |
Cascais and Estoril | €5,591 |
Vilamoura | €7,864 |
Vale do Lobo | €9,252 |
Quinta do Lago | €13,256 |
Imbalance between supply and demand
According to the E&V study, a pronounced imbalance persists in the Portuguese real estate market, with demand remaining consistently high while supply continues to fall short. In recent years, housing demand has exceeded the delivery of new homes by an estimated 14,000 units annually. This structural shortfall has placed sustained upward pressure on prices, particularly in metropolitan centres and along the coast.
There are, however, tentative signs of progress. The first months of 2025 saw a 10% increase in the licensing of new residential projects. Even so, ongoing shortages of skilled labour and lengthy construction timelines continue to constrain output, limiting the market’s ability to respond effectively to rising demand.
Portugal attracts international investors
Over the past year, Portugal has further consolidated its standing as a competitive destination on the global stage. Factors such as quality of life, safety, climate and economic stability have continued to draw growing numbers of international buyers, reinforcing the country’s appeal among overseas investors.
“The Portuguese real estate market continues to demonstrate a remarkable capacity for adaptation, even in a demanding global context. Demand remains consistent, both for buying and renting, reflecting Portugal's position as a safe, stable and highly attractive destination for investment,” said Daniela Rebouta, Sales Director of E&V Lisboa, Oeiras and Setúbal, in the press release.
Margarita Oltra, Regional Manager of E&V Portugal, noted that the market is becoming “increasingly mature and diversified, with more informed and demanding buyers.” She added that alongside location, considerations such as construction quality, sustainability, and long-term appreciation potential are playing an ever more decisive role in investment decisions.
Pressure mounts in the rental market
Population growth, Portugal’s continued international appeal, and the persistent challenges associated with purchasing a home are all intensifying pressure on the rental market. This strain is particularly evident in metropolitan areas, where demand continues to outpace supply, driving prices steadily higher.
The data underscores a clear structural issue: housing supply must expand to accommodate rising demand and ease upward pressure on rents.
According to the Market Report, the national economy is forecast to grow by approximately 2.6%, a development expected to facilitate access to mortgages and further stimulate both buying and rental activity. Established urban centres and coastal regions are likely to remain the most sought-after locations, reflecting enduring demand in these prime areas.
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