Portugal’s Real Estate Prices Jumped 17.2% in the Past Year – Outpacing Europe’s Major Markets
Over the past year, Portugal’s housing market has experienced one of the strongest growth rates in Europe – with property prices rising 17.2% year-on-year in the second quarter of 2025, according to the latest Eurostat Housing Price Index.
While most European countries have seen their real estate markets cool due to higher interest rates, Portugal continues to defy the trend. In comparison, Germany and Sweden recorded slight price drops of around 1–3%, while France and Italy saw modest increases between 3–5%. Even Spain, often compared with Portugal due to its tourism-driven demand, grew by approximately 6–7% in the same period.
So, what explains Portugal’s resilience?
One key factor is the steady flow of international demand. The country remains highly attractive to digital nomads, retirees, and investors from France, the UK, and the United States, drawn by Portugal’s lifestyle, relative affordability, and economic stability. Despite changes to the Golden Visa program, international interest in cities like Lisbon, Porto, and the Algarve remains strong.
Another major driver is limited housing supply. Construction activity in Portugal has not kept pace with demand – due to high building costs, bureaucratic licensing processes, and a shortage of skilled labor. As a result, newly built homes are quickly absorbed, and urban renovation projects continue to gain momentum.
In addition, the rental market boom is reinforcing investor confidence. Long-term rental demand, particularly from young professionals and remote workers, keeps rental yields strong and vacancy rates low.
Still, analysts caution that such rapid appreciation may slow in 2026 as affordability challenges grow and interest rates stabilize. Yet Portugal’s fundamentals – strong demand, livability, and urban renewal – continue to position it among Europe’s most promising real estate markets.
Sources:
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Eurostat, “House prices up by 5.1% in the euro area – 17.2% in Portugal”, Q2 2025.
Available at: https://ec.europa.eu/eurostat/web/products-euro-indicators/w/2-03102025-bp
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Idealista, “House prices in Portugal have doubled in 15 years”, October 2025.
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Global Property Guide, “Portugal Residential Property Market Analysis 2025”.
Available at: https://www.globalpropertyguide.com/europe/portugal/price-history
Disclaimer:
This article is based on publicly available data. It is intended for informational purposes only and does not constitute financial or investment advice. Market conditions may change, and readers are encouraged to consult professional advisors before making investment decisions.