Portugal housing crisis: homes under €200k down 73%

Access to housing in Portugal is becoming increasingly difficult as property prices continue to rise far faster than wages. There are fewer homes families can realistically afford without overstretching themselves. Evidence of this is stark: the number of homes for sale under €200,000 has fallen by 73% nationwide over the past five years. At the same time, more expensive properties, priced above €500,000, are steadily appearing on the market.

The picture is clear: affordable homes are disappearing, giving way to high-end properties. idealista data shows that between Q3 2020 and Q3 2025, homes priced under €200,000 dropped sharply, while properties in the €200,000–€300,000 range fell by 32%.

In contrast, homes listed between €400,000 and €500,000 rose by 37%, and those above €500,000 jumped by 42% over the same period. High construction costs, delays in licensing, and heavy taxation are among the factors driving prices higher across the country.

Where has affordable housing vanished most?

At a regional level, almost every major city now has fewer homes under €200,000 than five years ago. Vila Real is the only exception, where affordable housing supply actually rose by 16%.

In cities such as Funchal, Faro, Lisbon, Ponta Delgada, Porto, Setúbal, Aveiro, and Braga, the supply of homes under €200,000 has nearly halved. These properties tend to sell quickly, reflecting the income levels of local families. Developers and builders are struggling to offer homes at lower prices due to rising construction costs, taxes, and other expenses.

For the €200,000–€300,000 bracket, supply fell in 12 major cities between summer 2020 and summer 2025. The steepest drops occurred in Funchal, Faro, and Lisbon (all over 75%), while Porto saw a 44% decline. Conversely, supply grew in eight inland cities and in Alentejo, with Beja doubling the number of homes in this bracket.

Meanwhile, higher-end properties are seeing strong growth. Homes priced between €400,000 and €500,000 have more than tripled in nine cities—including Guarda, Leiria, Vila Real, Castelo Branco, Ponta Delgada, Viseu, Évora, Aveiro, and Braga—where supply was previously scarce. Setúbal and Santarém also saw the number of such homes double, while Faro, Lisbon, and Portalegre experienced declines.

The rise in homes over €500,000 is even more pronounced, covering nearly all cities and often at much higher growth rates. Lisbon and Porto are the only exceptions: there are fewer homes over €500,000 than five years ago. This reflects strong demand for high-end properties in the country’s largest cities, where supply was already significant in 2020 (accounting for 45.5% of Lisbon’s stock and 23.5% of Porto’s).

Affordable vs premium homes: the changing landscape

After five years of sharp declines, homes under €200,000 are now extremely rare in major urban centres. In summer 2025, they made up just 1% of Funchal’s stock, 2% in Lisbon, 3% in Faro, and 5% in Porto. Back in summer 2020, they accounted for over 25% in Funchal and Porto, and more than 10% in Lisbon and Faro.

While lower-priced housing has fallen almost everywhere (apart from Vila Real), some inland cities still have a significant supply. In Guarda, Portalegre, Castelo Branco, Beja, and Bragança, homes under €200,000 still make up over half of local housing stock.

At the other end of the market, homes over €500,000 now dominate in several cities. They represent more than half of all listings in Funchal (66%), Faro (63%), and Lisbon (63%), while in Porto, one in three homes costs more than half a million euros. Previously scarce, premium housing is now more visible in other cities too: in Aveiro, it has grown from 4.4% of stock in 2020 to around 25% in 2025.

Even with strong growth in inland cities, high-end homes still account for less than 10% of stock in Beja, Portalegre, Bragança, Guarda, and Castelo Branco.