The European Central Bank (ECB) highlighted that Portugal is among the Eurozone countries with the highest growth in house prices by the end of 2025, warning of the pressure caused by the housing shortage.
In its financial stability report, released on May 27, 2026, the ECB said that “residential property prices showed a strong overall increase in the third quarter of 2025, although with significant variations between countries”.
"Eurozone countries such as Bulgaria, Croatia, Lithuania and Portugal recorded solid growth in both residential property prices and mortgage lending, although household debt remains relatively low in some cases," the central bank indicated.
In contrast, Germany, France, Austria, and Finland recorded more moderate growth in both house prices and mortgage lending.
The ECB also highlighted that the supply of housing remains insufficient in the face of increased demand in several Eurozone countries, noting that the PMI index for residential construction remains below 50.
"This discrepancy is contributing to the housing shortage, amplifying upward pressure on prices in several markets," the central bank warned.
According to the report, house prices are rising faster than incomes in some markets, exacerbating the risks of overvaluation.
The institution added that "the increase in overvaluation measures, combined with the tightening of financial conditions, has resulted in a slight increase in extreme risks for residential property prices in the Eurozone in early 2026."
In the commercial real estate segment, the ECB considered that the market has stabilised, although "structural challenges" persist.
According to the report, the percentage of investors who believe the commercial real estate market is recovering remained "broadly stable, but moderate," below 50%.
"Most investors in markets like Germany, France, and Austria tend to see the market as near the bottom of the cycle or still in recession," the document says.
According to the central bank, "most investors in countries like Greece, Spain and Portugal, however, perceive market conditions as being in recovery or at the peak of the cycle."
Furthermore, the ECB also warned that the Eurozone financial markets continue to evolve in an "orderly" context, but remain exposed to a possible "sharp correction" should the currently very favourable scenarios be negated.
