As we reach mid-2025, Portugal’s property market is showing signs of cooling after years of rapid growth. Prices are still rising, but more slowly, while transactions and lending saw a strong start to the year.
This updated July 2025 report combines fresh data from Kyero, the Portuguese Institute of National Statistics, Confidencial Imobiliário, Eurostat and AICCOPN, plus insight from top estate agents across Portugal. Together, they offer a clear snapshot of where the market stands now – including key trends, regional shifts, and what international buyers can expect in the second half of the year.
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Portugal property market overview 2025 - July update
Albufeira, one of the jewels in the crown of the Algarve region, is officially the most popular location for foreign buyers to buy property in Portugal, according to the latest data from Kyero
Portugal’s housing market has eased off the accelerator in recent months. Monthly price growth slowed to just 0.2% in May 2025, down from 1.4% in April and 2.7% in March, according to Confidencial Imobiliário. Yet on an annual basis, prices remain robust, up 15.1% year-on-year. This deceleration could signal a cooling trend, offering a window of opportunity for international buyers - though sellers and investors are watching closely to see if it’s a temporary breather or the start of a longer adjustment.
Transaction activity remains strong. In Q1 2025, 41,358 homes were sold - a 25% year-on-year increase - and between March and May, 41,040 transactions were recorded, according to SIR. The National Institute of Statistics (INE) reported the value of these transactions hit €9.6 billion, up 42.9% on the same period in 2024.
Existing homes continue to drive growth, with their prices rising 17% year-on-year in Q1, outpacing new builds (+14.5%). Quarter-on-quarter, prices rose by 4.8%, again led by existing dwellings (+5.3%).
Portugal's colourful capital, Lisbon, is the 2nd most popular place to purchase property for foreign property buyers
The lending market is also buoyant. Portuguese banks granted €7.043 billion in real estate loans between January and April 2025 - an increase of 38% compared to the same period last year. Lower interest rates (down 94 basis points in April) are fuelling demand.
2024 saw Portugal continue its winning streak in global rankings and international recognition. The country secured its position as the 7th safest country globally, topped the OECD's Family Relocation Score, and was featured heavily in the 2024 World Travel Awards, picking up gongs for, amongst other things, world’s leading adventure tourism destination (Azores), world’s leading beach destination (Algarve), world’s leading city break destination (Lisbon), and world’s leading emerging tourism destination (Braga).
Louise Dell, Kyero Co-founder says “Portugal’s property market continues to offer fantastic opportunities for international buyers. While price growth remains strong, there are still plenty of areas where buyers can find excellent value, and the lifestyle that draws people here hasn’t changed.”
Portugal's 2025 economic outlook
Historic Lamego - part of a Portugal property market still rich in hidden gems
Portugal’s GDP growth has been forecast at around 2.0% in 2025, according to the IMF’s latest World Economic Outlook, above the EU average, and inflation is easing to 1.9%. Public debt continues its decline, projected to dip below 90% of GDP by 2026, while EU Recovery and Resilience Plan funds are fuelling infrastructure projects and construction activity.
Tourism, a key driver of the economy, has reached record highs. In 2024, Portugal welcomed 29 million non-resident tourists (+9.3% year-on-year), with Spain, the UK, and France leading the way, according to INE. The sector generated €27.65 billion in revenue (+8.8% year-on-year), according to the Bank of Portugal, and early 2025 figures show continued growth in overnight stays and visitor spending. Overnight stays by foreign tourists made up 67.7% of the total, reaffirming Portugal’s appeal as both a lifestyle and investment destination.
Politically, a minority government led by the centre-right Democratic Alliance (AD) under Prime Minister Luís Montenegro took office in May 2025. Housing affordability and infrastructure top their agenda, and while political gridlock in future is possible, policy stability and EU support continue to favour international buyers.
Where to buy property in Portugal 2025
Not only is Castelo Branco 8th on the list of most popular locations for foreign buyers in Portugal, it also saw a 22.9% increase in enquiries from foreign buyers in 2024.
Kyero’s July 2025 data highlights an intriguing shift: inland regions are emerging as smart picks for value-seeking buyers. Coimbra leads the charge with a staggering 37.1% annual price growth to €240,000 - still a bargain compared to Lisbon (€550,000) and the Algarve (€490,000). Other inland standouts include Bragança (+36.2%) and Santarém (+30.9%).
Regions like Viseu and Vila Real saw price dips (-7.7% and -8.6%), which could present opportunities for savvy investors ahead of potential rebounds.
Portugal's 2025 hotspots
Ferreira do Zêzere (+27.6% buyer interest): Picturesque and affordable, with strong lifestyle appeal.
Castelo Branco (+22.3% enquiries): An inland success story drawing both domestic and foreign buyers.
Castro Marim (+18.1%): A border town with historic charm and proximity to Algarve beaches.
Meanwhile, perennial favourites like Albufeira, Lisbon, and Porto remain in high demand. Porto now ranks as the second most-searched location, overtaking Lisbon, thanks to its economic dynamism and cultural pull. Porto recently topped the rankings of the Financial Times' European Cities and Regions of the Future ranking.
For buyers seeking the most affordable options in Portugal, the latest 2025 data highlights several standout municipalities. Penamacor in Castelo Branco tops the list with average property prices of just €464 per square metre. It’s followed by Alcanena in Santarém (€660/m²), Tábua in Coimbra (€675/m²), Seia in Guarda (€679/m²), and Penela in Coimbra (€701/m²). These inland areas combine low entry costs with a slower pace of life, making them attractive to bargain hunters and those looking for renovation projects.
In central Portugal, Milay Correia from Era Covilhã estate agent says "Covilhã, Fundão, Belmonte and Seia continue to attract foreign buyers, mainly for their proximity to the Serra da Estrela, good transport links, and value for money.
Luís Cavadas, Business Development Executive at Kyero comments “The shift we’re seeing towards inland markets is remarkable. Buyers are realising there’s so much more to Portugal than the coast - regions like Castelo Branco, Bragança and Coimbra now offer excellent value and strong growth potential.”
Who is buying property in Portugal?
The vibrant seaside resort of Cascais, not far from Lisbon is number 7 in Kyero's list of top locations for foreign property buyers in Portugal
Portugal’s property market continues to be shaped by a diverse pool of buyers in 2025, with international demand remaining a key driver alongside strong domestic activity.
British buyers have cemented their position as Portugal’s top overseas market, growing their share from 16.9% in 2024 to 17.9% in H1 2025 (Kyero data). This is especially striking given Brexit-related challenges that initially dampened UK demand. For many Britons, Portugal remains a natural choice thanks to close cultural ties, English-speaking communities, and relatively straightforward residency options via the D7 and Golden Visa schemes. Coastal areas like the Algarve and Cascais remain favourites, while Porto and Braga attract younger, remote-working buyers seeking city life at a lower cost.
American buyers, holding steady at 11.7% of international interest, continue to make headlines for their focus on high-value properties. US demand is strong in Lisbon’s luxury neighbourhoods - Chiado, Lapa, and Príncipe Real - and the Algarve’s “Golden Triangle” of Quinta do Lago, Vale do Lobo, and Vilamoura. Tax incentives under Portugal’s NHR regime remain a major draw, though potential changes have spurred some to accelerate purchases in early 2025.
Artur Cardoso of Casas do Sotavento estate agents, based in the Algarve, observes they’ve been seeing a lot more “Americans, British, Germans and Portuguese.”
At Remax Expogroup, Pascoal Santos says international demand in their Portimão branches is still led by buyers from the “United Kingdom.”
Meanwhile, demand from Northern and Western Europe is rising. Dutch buyers now account for 22.7% growth in share, attracted by affordable inland regions and Portugal’s sustainability credentials. Spanish buyers (+18.5%) are increasingly looking across the border for investment properties, with many targeting Alentejo’s border towns like Elvas and Vila Viçosa. Irish (+8.7%) and Belgian (+8%) buyers, too, are drawn by Portugal’s mild climate and relatively low property taxes.
The port city of Portimao is the 9th most popular Portuguese location for foreign property seekers
“In 2025 we have seen a steady rise in interest from the French, Belgians, North Americans and Germans. Many are looking at the Centro region - especially the Serra da Estrela and Serra da Gardunha areas - for their tranquillity, natural surroundings and affordable cost of living. This year we have also received more enquiries from Brazilians and Swiss buyers, particularly for rural properties or smallholdings with land and a ruin to restore. Compared with previous years, the market is more diverse: the British share is smaller, while new buyer profiles, especially digital nomads and families relocating away from large urban centres, are more prominent.” — Milay Correia, ERA Covilhã
Domestic demand remains a stabilising force, particularly in Lisbon and Porto. Portuguese buyers still account for most transactions, ensuring the market isn’t overly reliant on international capital. This has helped prevent major price swings as global economic conditions fluctuate.
Another sign of Portugal’s international appeal is the sustained volume of nationality applications. Between January and June 2025, 121,460 new requests were filed with the IRN. Since 2020, more than 1.5 million people have sought Portuguese citizenship, whether through ancestry, Sephardic Jewish descent, or naturalisation pathways. For many property buyers, securing a home is part of a wider relocation strategy tied to lifestyle and citizenship planning.
Latest Portuguese property market news buyers should be aware of
Setubal rounds out the top 10 locations. foreign buyers in Portugal
The Portuguese property market in 2025 isn’t just about numbers; it’s being shaped by broader social, economic, and regulatory shifts. Here are the key trends savvy buyers and investors should watch:
The luxury market in Portugal goes from strength to strength
Luxury real estate continues to perform strongly, driven by high-net-worth buyers seeking both lifestyle and prestige. Across the Iberian Peninsula, 47 branded residence projects are currently underway, representing more than 2,400 properties and 700,000m² of floor space (Branded Residences Monitor, 2025).
While Spain accounts for 62% of total surface area, Portugal is carving out a niche in ultra-luxury offerings. The most exclusive units in Comporta, Lisbon, and the Algarve are achieving eye-watering prices close to €24 million. Comporta in particular has become a magnet for global elites, with persistent rumours of A-list buyers including George and Amal Clooney and even the Duke and Duchess of Sussex. Its appeal lies in a unique mix of laid-back sophistication, low-density development, and proximity to Lisbon.
Braga, Lagos, and Comporta are identified in Engel & Völkers’ latest Market Report as emerging luxury hotspots. Braga’s economic growth and cultural vibrancy are attracting affluent domestic and foreign buyers, while Lagos benefits from a strong international community and year-round lifestyle appeal.
New build momentum
Portugal’s construction sector is picking up pace after years of lagging behind demand. In Q1 2025, the number of residential units licensed for construction jumped 18.1% year-on-year, totalling 9,804 new homes (AICCOPN). This is a welcome development for a market long plagued by supply shortages, especially in Lisbon and Porto.
However, the sector isn’t without challenges. Construction costs rose 3.1% year-on-year in January 2025, driven by labour cost increases of 6.9% (INE). Material prices have largely stabilised (+0.2%), but supply chain disruptions earlier in the decade continue to have lingering effects. Cement consumption fell slightly (-2.3%), a possible early signal of market caution.
Financially, the picture looks positive. In March 2025 alone, Portuguese banks granted €5.2 billion in new real estate credit (+41% YoY), reflecting robust confidence among developers and buyers alike.
Regulatory changes: More land for housing
The introduction of Decree-Law 117/2024 in early 2025 marks a significant shift in Portugal’s housing policy. The law simplifies the process for municipalities to rezone rural land for residential use by removing the requirement for detailed financial plans for infrastructure. This change speeds up approvals and is expected to open up new areas for development, particularly in inland regions where affordability and demand are both high.
For international buyers, this could mean greater choice and lower prices in emerging markets away from saturated coastal zones. However, local agents advise caution: zoning changes take time to translate into completed projects, and early-stage developments may lack established amenities.
How does Portugal's property market compare to other European nations?
Portugal continues to lead the European Union in house price growth. According to Eurostat’s Q1 2025 data, Portuguese house prices surged +16.3% year-on-year and +4.8% quarter-on-quarter, well above the EU averages of +5.7% and +1.4%, respectively.
Over the past decade, Portugal ranks 6th among EU nations for cumulative house price growth (+80%) and 10th for rent growth (+28%). This long-term upward trajectory underscores the market’s resilience and appeal for investors seeking both capital appreciation and rental income.
Are buyers slowing down in 2025?
A shift in buyer behaviour is emerging in 2025, with some agents reporting longer decision-making times and extended sales processes. “Overall, time on market has lengthened in 2025, especially for older properties or those needing major renovation,” notes Milay Correia of ERA Covilhã. “However, homes in strategic locations (close to routes such as the A23, tourist areas, natural surroundings or universities), in good condition and at competitive prices are still in demand.” Pascoal Santos of Remax Expogroup echoes this trend, adding: “Buyers are taking longer to decide and complete the purchase process.”
But this isn’t true everywhere. In the Algarve, where demand from international buyers remains strong, Artur Cardoso of Casas do Sotavento offers a contrasting perspective: “They are selling quickly.”
The historic city of Braga has seen a big increase in interest in recent years from property buyers and tourists
Buyers increasingly seeking green properties
Sustainability has graduated from optional extra to market necessity, rather like air conditioning in the Alentejo - though mercifully with better implications for the planet. This shift reflects both regulatory requirements and changing buyer preferences, particularly among younger purchasers and international investors. Properties with strong environmental credentials often command premium prices and attract stronger rental demand. Milay Correia from Era Covilhã estate agent says “there is growing attention to energy performance and thermal comfort.”
Outlook for the rest of 2025
The gorgeous city of Aveiro on Portugal's west coast is known for its canals and has been nicknamed the Venice of Portugal
Portugal’s property market in mid-2025 is like a well-made caldo verde: warming, substantial, and with a few unexpected chunks below the surface.
Sales activity remains solid, though growth is slower than in recent years. National prices are expected to rise by around 4–5% this year, with Lisbon and the Algarve still leading — but not by much. Emerging value can be found in places like the Alentejo, central Portugal, and parts of the North, where foreign buyers are starting to look beyond the obvious.
Supply remains tight, and while mortgage rates may ease slightly, policy shifts like the end of Golden Visas and rental licensing rules are reshaping buyer behaviour — especially among investors and part-time residents.
“With prices rising more slowly, buyers have a window of opportunity we haven’t seen in years,” says Martin Dell, Kyero Co-founder. “Portugal’s market is still strong, but the heat’s come down just enough to give serious buyers a better shot at securing the right property at the right price – before the next upswing.”
Five smart moves for buyers right now
1. Budget realistically. Expect 10–12% in additional costs — including IMT, stamp duty, and legal fees.
2. Understand local rules. Rental and renovation regulations can vary by municipality — and trip up the unprepared.
3. Focus on future appeal. Energy ratings, insulation and broadband access all affect long-term value.
4. Secure financing early. Portuguese mortgage approvals can be slow, so don’t wait to get your paperwork in order.
5. Plan your long game. Consider resale demand and rental yield potential — especially if buying off the beaten track.
The second half of 2025 may move at a steadier pace – but there’s still plenty to savour. Boa sorte e boas compras!
Updated every six weeks: from rustic river-view cottages and island hideaways to farmhouse pairs with pond-to-pool potential, we’ve cherry-picked Portugal’s latest bargains—each still cheaper than a Lisbon studio. Think Algarve boltholes, Braga farmsteads, and Azores retreats begging for your grand design. This edition brims with off-grid charm and coastal cool.
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