House prices in Portugal

The global economic context continues to present challenges and uncertainties. However, the luxury real estate market remains resilient.

The Lisbon region has increasingly attracted families to live, visit, and invest. This high demand has been reflected in house prices, as the housing supply has not kept pace with this growth.

The Algarve has become more popular than ever: not only among visitors who are captivated by its beaches and warm, mild climate throughout the year but also among investors. The region's property market continues to feel the effects of this dynamic and is growing visibly.

House rents in Portugal continue to rise, at a faster pace than in other European markets. This makes residential rentals an attractive business for investment in our country.

The Algarve is the most accessible prime market in Europe for millionaires, closely followed by Bordeaux and Tuscany.

Concerns about house prices (whether for renting or buying) are reaching record levels in the wealthiest countries, surpassing other issues such as health or education.

House prices in Portugal continue to increase, having grown by 6.5% over the past year, 2.5% over the past six months, and 2.9% over the past three months, according to the Knight Frank Global House Price Index. Portugal also ranks 14th in the index, ahead of countries such as France, Germany, Switzerland, and the USA.

The purchase of houses in Portugal has been cooling down, given the high costs of housing, along with high interest rates on loans and low purchasing power, which continue to be felt. And this cooling in demand for houses in the country has been reflected in prices. The National Statistics Institute (INE) reveals this Tuesday, April 23rd, that the set of homes sold in the final stretch of 2023 had a median cost of 1,619 euros per square meter (euros/m2), a value of 7, 9% higher compared to the same period last year. But compared to the previous quarter, house prices in Portugal fell 1.3%, a trend felt in 14 of the 24 most populous municipalities, Lisbon and Porto included.

“Housing prices continued to increase significantly in Portugal, in contrast to most other EU countries”, warns the European Commission in a recent in-depth analysis report on the country's policies. Although growth has slowed, prices “remain overvalued”.

Portugal continues to be an attractive country to live in, as well as invest in, despite the uncertain economic and political context. But the lack of homes for sale is a structural problem with no end in sight, as new home construction is not keeping up with demand in the country.