Choosing the ideal place to live in Portugal has become more difficult in the current context, especially for those on low wages. Home prices are on the rise and inflation continues unabated, reducing purchasing power and disposable income. In addition, interest rates on home loans are rising and should continue to do so, as the European Central Bank (ECB) once again raised its key interest rates by 25 basis points this Thursday. But there is good news for those considering escaping the real estate pressure felt in the big urban centres and moving to the interior of the country, where life is slower, there is more contact with nature and many places to discover. This is precisely where the 10 cheapest municipalities in which to buy a homeware to be found, and where home loans are also more affordable for families. Come and find out where you can live in Portugal on a tighter budget without losing out on quality of life.
Salaries don't keep up with home prices in Portugal
Living on low wages has become a real headache in Portugal, with families having high housing costs and needing to do financial gymnastics to pay for other household expenses (which are getting worse) and more. According to the first European Barometer on Poverty and Precariousness, one in two Portuguese currently in employment feels that what they earn is not enough to cover their expenses. And there are reports of families already cutting back on food and pharmacy to pay the rent, says Deco.
After all, although average Portuguese salaries are increasing - reaching 1.358 euros in May 2023, almost 100 euros more than a year earlier, according to the most recent Social Security figures- the prices of goods and services are also rising due to inflation, which ultimately reduces their purchasing power.
This reality is well reflected in the housing market: although home prices in Portugal are stabilising, they are still not compatible with the disposable incomes of the Portuguese. On a national level, buying a home cost a median of 2,526 euros per square metre (euros/m2) at the end of August, according to idealista data. This means that anyone who wants to buy a100 square metre (m2) home now will pay around 252,600 euros.
In this case, the instalment on the home will be 1,316 euros/month, taking into account a loan with a 6-month Euribor, a spread of 0.8% and a 30-year term, according to simulations by idealista/créditohabitação. And in the future, home loan instalments are likely to rise even more, since the ECB raised its key interest rates again by 25 basis points this Thursday (14 September), a decision that has a direct effect on Euribor rates.
But there are alternatives outside the big urban centres, where prices have worsened on a larger scale. idealista's data for August shows that buying a home is cheaper than the national average in 226 of the 254 municipalities (out of a total of 308 municipalities in the country) - and in 111 municipalities it is possible to buy a home for less than 1,000 euros/m2. This means that the price of homes in Portugal has been exacerbated, above all, by the prices in the big cities such as Lisbon, Porto, Faro and Funchal and their outlying municipalities.
And, after all, where is it possible to live on low wages in Portugal? In the 10 cheapest municipalities to buy a home, where the median price is less than 500 euros/m2 and the instalments are at least five times lower than the national median. They are mainly located in the interior of the country, in the districts of Guarda, Castelo Branco, Coimbra and Portalegre. They offer peace, less stress, security, quality of life, lots of contact with nature, services such as schools, universities and hospitals, and even benefits and incentives for residents (tax, housing and employment), as they are losing population. Come and meet them.
Cheapest municipalities to buy a house in Portugal
| Ranking | Municipality | Price (euros/m2) | Monthly variation (%) | House payment (euros/month) |
| 1 | Penamacor | 379 | -12.5% | 197 |
| 2 | Góis | 420 | -5.0% | 218 |
| 3 | Gavião | 436 | 3.9% | 227 |
| 4 | Crato | 447 | -10.3% | 233 |
| 5 | Penacova | 448 | -6.4% | 233 |
| 6 | Figueira de Castelo Rodrigo | 448 | 7.5% | 233 |
| 7 | Pinhel | 449 | 0.2% | 233 |
| 8 | Celorico da Beira | 450 | -1.6% | 234 |
| 9 | Nisa | 451 | 0.3% | 235 |
| 10 | Sabugal | 461 | 5.3% | 239 |
Cheapest towns to buy a home: what they have to offer
1st Penamacor, Castelo Branco
The municipality of Penamocor, located in the district of Castelo Branco, is actually the cheapest to buy a home in the country, costing 379 euros/m2 on average, according to Idealista's data for August. This means that you can buy a100 square metre home for less than 38,000 euros (and prices have been falling). If you take out a mortgage to buy a home here (with a 6-month Euribor, a spread of 0.8% and a 30-year term), you'll pay a monthly instalment of 197 euros, almost seven times less than the instalment calculated for the national median.
Living in Penamocor means living in an inland territory (close to the Spanish border), in the midst of a population of around 6,000 inhabitants. Here, the average monthly salary for employees was almost 1,000 euros in 2021, according to the statistical summary of the Ministry of Economy and the Sea (MEM).
The economy here revolves around the textile trade, agriculture and forestry, with some industry based on the traditional processing of agricultural products (olive oil, cheese, honey and sausages), as well as the extraction of wood and the manufacture of furniture. According to the Penamocor municipal website, "construction is by far the sector that employs the most people directly and indirectly, with companies with public works licences standing out".
In this inland municipality you can live in direct contact with nature, including the Serra da Macata Nature Reserve and various geosites to visit and enjoy with the family. In addition, there are several monuments to discover, such as Penamocor Castle, the Covento de Santo António or the bread-baking oven in a rural setting.
2nd Góis, Coimbra
The second cheapest municipality in which to buy a home is Góis, where the median cost is 420 euros/m2. This means that families who decide to live in the Centre of Portugal can buy a home in this municipality for 42,000 euros, paying an initial monthly instalment of 218 euros (on a 6-month Euribor mortgage contracted in August).
Located in the district of Coimbra, the town of Góis had 3,811 inhabitants in 2021 (and has been losing population over the years). The biggest employers here are social support activities for the elderly, building construction and forestry, with the average monthly earnings for employees standing at 877 euros in 2021, according to the Ministry of the Economy and the Sea's statistical summary.
In this municipality of 263.3 square kilometres you can find many places to enjoy your free time, especially in nature. This is where the Serra do Penedo and the Ceira River Valley (which cuts through the municipality) stand out. Between the river and the mountains, there are also several hiking trails to discover, as well as river beaches. Among the heritage buildings are old olive oil mills and watermills, not forgetting the white homes and schist villages.
3rd Gavião, Portalegre
We travelled to Alentejo to discover the third municipality with the lowest home prices: Gavião. At the end of August, the median cost of buying a home was 436 euros/m2, 3.9 per cent more than in the previous month, according to data from Idealista. All told, to buy a 43,600-euro home with a loan, a family will pay a monthly instalment of 227 euros, according to simulations by idealista/créditohabitação. This is almost six times less than the monthly instalment calculated from the national median.
But what does the municipality of Gavião have to offer? Located in the district of Portalegre, this municipality with 3,381 inhabitants in 2021, offers jobs mainly in social support activities for the elderly, road and airport runway construction, the installation of industrial machinery and equipment, as well as bakery and forestry. And here the average earnings of an employee are 858 euros per month, according to 2021 data compiled by MEM.
As for the places to visit at the weekend to explore Gavião (which is 295 kilometres long), the highlights are the Anta do Penedo Gordo and the access route to Fonte Velha, where you can see the slopes of the River Tagus, as well as figures carved into the stone. In addition, there are several walking routes to take and river beaches to enjoy, such as the Alamal river beach and the Ribeira da Venda picnic area, according to the municipality's website. Other places to explore include Belver Castle, the Soap Museum and the Wine and Bread Museum.
4th Crato, Portalegre
The Alentejo is also home to the fourth cheapest municipality in which to buy a home. In the town of Crato, the median cost of buying a home was 447 euros/m2 in August, 10.3 per cent less than in July. This means that the instalment for a100 m2 home costing 44,700 euros could be 233 euros/month, with a 6-month Euribor, a 0.8% spread and a 30-year term.
This municipality in the Portalegre district had 3,244 residents at the end of 2021, where the average salary per employee was around 911 euros. And here the sectors with the most jobs are social support activities for the elderly, agriculture and animal production, along with baking, according to the MEM.
Crato has a history dating back to the 3rd millennium BC. And here you can enjoy various tours of Casa do Adro, a stroll through the village, the Alentejo wine route and contemplate various megalithic monuments, such as the Tapadão Dolmen. Among the monuments to visit are the Monastery of Santa Maria de Flor da Rosa and the Ribeira de Seda Roman Bridge, according to the municipal website. Another point of interest is the Crato Festival, which is usually held at the end of August to liven up the summer.
5th Penacova, Coimbra
On the banks of the River Mondego is the municipality of Penacova, in Coimbra. This is the fifth municipality where it is most affordable to buy a home in the country, with median prices standing at 448 euros/m2 in August, down 6.4 per cent on the previous month, according to data from Idealista. Here, a family can pay a home instalment of 233 euros/month.
Anyone who wants to be part of Penacova's populationof 13,017 residents in 2021 can expect anaverage salary of around 1,023 euros per month, according to MEM data. The main employers are road haulage and the construction sector.
There's plenty to discover in this municipality in the district of Coimbra. By living here you can enjoy the fresh air of the mountains and the river, as well as its landscapes, says the Penacova local authority. There are several river beaches where you can cool off in summer, such as the Vimieiro and Reconquinho river beaches. There are various routes and trails you can take throughout the year, such as the Arista route. And there's still plenty of heritage to explore, such as the Mondego Bookshop, the Lorvão Monastery (one of the oldest in Europe) and the Mill Museum, for example.
6th Figueira de Castelo Rodrigo, Guarda
We went back to the interior of Portugal to discover the sixth cheapest municipality in which to buy a home: Figueira de Castelo Rodrigo, located in Serra da Estrela, in the Guarda district. Buying a home here had a median cost of 448 euros/m2 in August, so the instalment for a 100 m2 home will be 233 euros/month, according to the same estimates.
In this municipality, with 5,090 inhabitants in 2021, the main activities employing the population are social support for the elderly, agriculture and animal production, and supermarkets. And the average wage for employees was 894 euros that year, according to the MEM.
Here, too, there are many points of interest that you can explore as a family. One of them is the historic village of Castelo Rodrigo, the Serra da Marofa and the Santa Maria de Aguiar Monastery. In addition, there are several hiking trails and routes through the historic villages to do at the weekend, according to the local authority.
7th Pinhel, Guarda
The seventh cheapest municipality to buy a home in Portugal is also in Guarda, in the Serra da Estrela. We're talking about Pinhel, where the price of homes for sale stood at 449 euros/m2 in August. So families interested in buying a home (of 100 square metres) here with a mortgage can expect a monthly instalment of 233 euros.
It's between hills, mountains and the Serra da Marofa that Pinhel is located, a town with 8,003 inhabitants at the end of 2021. And here the sectors that employ the most are construction, social support for the elderly and the manufacture of granite and stone articles, with workers earning an average of 921 euros a month, according to the MEM.
The "Falcon City" is characterised by plateaus, fortresses, monuments and vast fields, says the municipality. Pinhel Castle, surrounded by a wall, is a must-see, as are the 16th-century homes scattered throughout the old part of the municipality. Here you can also enjoy the literary tourist route and the various festivals they hold throughout the year, such as the Traditions Fair (before Carnival) and the Medieval Fair (in June).
8th Celorico da Beira, Guarda
We continue in Serra da Estrela and the district of Guarda, to discover the eighth municipality with the most affordable homes for sale in the country in August. We're talking about Celorico da Beira, a municipality with 6,565 residents in 2021, where buying a home cost an average of 450 euros/m2. This means that the home instalment for a 100 m2 home should be around 234 euros per month, according to the simulations.
Various economic activities take place in this area. But the ones that employ the most, according to MEM data, are road haulage, underwear manufacturing and social support activities for the elderly. In Celorico da Beira, the average earnings per employee were 1,100 euros in 2021.
Crossed by the River Mondego, Celorico da Beira is a municipality where you can visit two castles: Celorico and Linhares da Beira, as well as the Historical Village of Linhares da Beira, which has earned the nickname of Paragliding Cathedral. What also stands out in this municipality are the landscapes that invite you to take nature walks with family and friends, where you can spot flocks of sheep.
9th Nisa, Portalegre
The ninth most affordable municipality to buy a home is Nisa, located in the district of Portalegre. In this municipality, buying a home cost an average of 451 euros/m2 at the end of August, with prices having stabilised compared to July. If a family needs to take out a bank loan, they can expect a monthly instalment of 235 euros.
Nisa is home to 5,831 people, who are mainly employed in social support activities for the elderly, in the dairy industry, as well as in supermarkets and the construction sector. The average monthly wage for employees was around 886 euros in 2021, according to the MEM.
In this municipality in the Alentejo countryside, there's plenty to see and visit, such as the Embroidery and Clay Museum, Casa do Forno, Amieira do Tejo Castle and various megalithic monuments, such as the Anta de S. Gens I and the Anta I of the Saragonheiros. For family walks in nature, there's also Portas de Ródão, located between the two banks of the River Tagus, says the Nisa Câmara website.
10th Sabugal, Guarda
The tenth and last cheapest municipality to buy a home is Sabugal, located in the district of Guarda, where the median cost was 461 euros/m2 in August, according to the same Idealista data. Even so, the price rose by 5.3 per cent compared to the previous month. According to the idealista/créditohabitação simulations, the loan to buy a100 m2 home for 46,100 euros has a monthly cost of 239 euros, taking into account the 6-month Euribor, a 30-year term and a spread of 0.8%.
Sabugal is home to more than 11,000 people who earn an average salary of 968 euros per month (employees). According to data compiled by the MEM for 2021, the biggest employers in the municipality are social support activities for the elderly, construction, civil protection activities and the dairy industry.
As part of the natural landscape of the Serra da Estrela, this municipality is home to Sabugal Castle and the Sabugal Museum. And you can also take a trail through its five medieval villages (Alfaiates, Sabugal, Sortelha, Vila do Touro and Vila Maior), says the local authority. In terms of natural heritage, the Serra da Malcata Nature Reserve stands out, where you can take a family trip.