The Portuguese property market experienced a significant recovery in 2025, supported by resilient economic development. The Portuguese economy grew by 1.9 percent, primarily driven by dynamic domestic demand and a stable labour market. These framework conditions strengthened confidence in the market, which manifested in an increased level of activity and an upward trend in property prices. This development was particularly pronounced in the luxury and premium segments, as detailed in the Engel & Völkers Market Report Portugal 2025/2026. The analysis of current developments and trends underscores the attractiveness of the location.
Juan-Galo Macià, President of Engel & Völkers Iberia & South America, stated that the Portuguese property market demonstrated remarkable adaptability even in a challenging global environment. He highlighted the consistently high demand in the luxury and premium segments, which underpins Portugal's position as a safe, stable and prime investment location in Europe.
Portugal impresses not only with its landscape and quality of life but also with economic stability and secure conditions. This attracts both domestic and international property buyers and strengthens confidence in the long-term value retention of properties. The market is currently characterised by a scarcity of supply amidst persistently high demand. This has led to a significant price increase: in the third quarter of 2025, a growth of 17.7 percent year-on-year was recorded, one of the highest values in recent years.
The data also shows significant regional price differences in average square metre prices, illustrating the diversity of the national market. Regions with strong international appeal stand opposite markets with more moderate prices, which appeals to different buyer segments and creates a wide range of investment opportunities for primary and secondary residences. Macià mentioned in this context an increasingly mature and diversified market with more informed and sophisticated buyers, for whom, in addition to location, construction quality, sustainability and potential for value appreciation are decisive.
The coastal regions of the Algarve and the Lisbon metropolitan area are among the most sought-after markets. In the Algarve, Quinta do Lago reached the highest analysed price with an average of 13,300 Euro per square metre. Vale do Lobo followed with around 9,300 Euro, Vilamoura with approximately 7,900 Euro and Lagos with around 4,500 Euro per square metre. In the capital Faro, the average price was about 3,100 Euro, while Tavira (approx. 3,000 Euro) and Portimão (approx. 2,600 Euro) showed more affordable levels.
Lisbon and the Central region showed stronger price consolidation with an average of 3,200 Euro per square metre in Lisbon and Sintra, and 3,100 Euro in Oeiras and Setúbal. The exclusive coastal towns of Cascais and Estoril recorded an average of 5,600 Euro per square metre, where affluent international buyers in particular invest in luxury villas. Comporta in Alentejo achieved high popularity with 4,300 Euro per square metre. Western Portugal, known for its surf beaches, was around 3,100 Euro per square metre. In the North, Porto remained largely stable at approximately 4,300 Euro, while Vila Nova de Gaia had an average of 2,600 Euro and the Minho region, with Braga (approx. 1,700 Euro) and Guimarães, showed the lowest prices.
For 2026, a continued upward trend in the Portuguese property market is expected, supported by projected economic growth and a potential easing of financing conditions. Macià forecasts a revival of investments and consistently high demand, particularly in metropolitan areas such as Lisbon and sought-after coastal areas like the Algarve. Portugal remains an attractive market for national and international buyers due to the combination of landscape, quality of life and potential for value appreciation.
