If you're considering purchasing property in Portugal this year, you're looking at a market with steady growth, exciting new developments, and diverse opportunities across different regions. From the sun-drenched streets of the Algarve to the cultural riches of Lisbon, understanding the current market dynamics will help you make a more informed investment. Let's explore what's happening in Portugal's property landscape and what it means for international buyers.
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New housing supply: Fresh opportunities for buyers
Porto
According to Portugal's National Statistics Institute (INE), 2024 saw the completion of 24,639 new family homes across the country—a 4.2% increase compared to the previous year. This marks the third consecutive year that new home completions have exceeded 20,000, reaching the highest level since 2011.
For international buyers, this influx of new inventory is particularly good news. Not only does it provide more choice in prime locations, but new builds often come with modern amenities, energy efficiency standards, and contemporary designs that appeal to international preferences. And with another 34,000 homes with approved licenses expected to enter the market in coming years, supply constraints should ease in many popular areas.
Regional hotspots: Where to focus your search
Viana do Castelo
The geographical distribution of new property developments reveal some interesting patterns that could influence your buying decision:
Northern Portugalleads with 43.7% of new completions, suggesting significant investment and development in this often-overlooked region
Greater Lisbon accounts for 11.6% of new completions, maintaining its status as a prime investment location
Península de Setúbal (8.3%) and the West and Tagus Valley (7.6%) offer emerging alternatives close to Lisbon
While the Algarve isn't leading in terms of new development volume, its established popularity among international buyers makes existing inventory and select new developments particularly valuable.
Price trends: Where values are rising (and stabilising)
Beja castle
February 2025 data from Idealista shows nationwide property prices rose 5.6% year-on-year, with the median cost per square metre now standing at €2,742, according to their price index.
However, price movements vary significantly by region:
For international buyers, this presents interesting strategic options. Premium markets like Lisbon appear to be consolidating after years of growth, potentially offering better negotiating positions than in recent years. Meanwhile, emerging areas like Setúbal offer strong appreciation potential at lower entry points.
Premium locations: The top-end market
Funchal
Despite recent price stabilisation, Lisbon remains Portugal's most expensive property market at €5,515 per square metre. The hierarchy of premium locations continues with:
Porto at €3,643/m² Funchal (Madeira) at €3,528/m² Faro (Algarve) at €3,069/m²
Even at these premium prices, international buyers often find exceptional value compared to other European destinations. Lisbon's prices remain significantly below those of Paris, London, or Amsterdam, while offering a similarly rich cultural experience and increasingly sophisticated amenities.
Value markets: Affordable options worth exploring
The pretty village of Montsanto in Castelo Branco district
For buyers with more modest budgets or those seeking investment properties with stronger yields, several cities offer excellent value:
These inland cities might lack the immediate name recognition of coastal hotspots, but they offer authentic Portuguese living experiences, historical charm, and increasingly improved transport connections to major cities and airports.
Market indicators: What to watch
Recent market data shows some interesting trends that could impact your buying decision:
Completed transactions in January outpaced historical averages by 2%
Early signs of slowing demand have appeared in some segments
Supply continues to rise, potentially giving buyers more options and negotiating power
These indicators suggest a possible rebalancing toward a more buyer-friendly market after years of strong seller advantage.
Strategic advice for international property buyers
Based on this market analysis, here are three practical recommendations if you’re looking to purchase a Portuguese property in 2025:
1. Consider the timing carefully. With signs of slowing demand and increasing supply in some areas, particularly Lisbon, there may be less pressure to rush decisions than in recent years. Take time to explore different regions and properties to find the perfect match for your needs.
2. Look beyond the obvious locations. While the Algarve and Lisbon remain perennial favourites, areas like Setúbal (with 16.9% price growth) offer proximity to Lisbon at lower price points, and Northern Portugal provides excellent value with strong development activity.
3. Evaluate new builds versus resale properties. With significant new inventory entering the market, compare the premium paid for new construction against the potential renovation costs and character of older properties. New builds often offer better energy efficiency and lower maintenance, while resale properties may provide more space and authentic character for your investment.
Portugal continues to offer international buyers a compelling combination of lifestyle benefits, relatively affordable prices compared to other Western European destinations, and a property market with solid long-term fundamentals. Whether you're seeking a holiday home, retirement residence, or investment property, understanding these regional variations and market trends will help you make a more informed decision in 2025.
Sources: National Statistics Institute (INE), idealista price index, Savills Market Update
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