Report shows no signs of a slowdown in Portugal's property market
According to the newly released 2026-2027 Property Market Index Hotspots Report, Portugal’s property market continues to outperform the broader real estate markets of the European Union, the United Kingdom and the United States.
An analysis by luxury real estate research firm Property Market-Index found that Portugal’s median property prices increased by 17.9% year-on-year, with demand from international buyers showing no signs of slowing.
The company’s findings indicate that Portugal is expected to remain one of Europe’s strongest-performing property markets throughout 2026 and 2027.
According to the latest data cited in the report, the median bank valuation of residential property reached EUR2,025 per square metre in October, representing a 17.9% increase compared with the same period a year earlier, more than three times the European Union’s average growth rate of around 5% in 2025.
The Algarve continued to lead regional growth, with average residential prices expected to reach EUR3,467 per square metre in 2025, up 9.3% from the previous year. Meanwhile, newly built homes in some of Lisbon’s most prestigious neighbourhoods, including Avenida da Liberdade, Lapa and Principe Real, were reportedly priced at up to EUR12,000 per square metre.
Supply-demand imbalance continues to drive prices
Amanda Collison, spokesperson for the Property Market Index, said the imbalance between supply and demand remains the main driver behind rising property prices.
“Between 2020 and 2024, an average of only around 21,000 new homes were completed each year, compared with approximately 104,000 annually in the early 2000s. However, demand has far exceeded the limited supply. In 2024, around ten properties were sold for every new home completed. This structural shortage continues to push prices higher, particularly in the country’s most sought-after locations, and we expect this trend to continue throughout 2026 and 2027.”
International capital continues to flow into Portugal
The report also highlights the continued inflow of international capital into Portugal. In 2024, total investment in Portugal’s property market increased by 51% year-on-year, with foreign investors accounting for 81% of all investment.
Based on eight weighted criteria, including regeneration investment, growth trends, land availability and infrastructure, the Property Market Index ranked Portugal’s leading regions according to their development potential, with scores above 100 indicating particularly strong prospects. Quinta do Lago in the Algarve topped the ranking with 194 points, followed by Cascais near Lisbon (191), Vale do Lobo in the Algarve (189) and Comporta near Lisbon (186), reinforcing their positions as some of Portugal’s most attractive property investment destinations.
Beyond the Algarve and Lisbon
In addition to the traditional hotspots of the Algarve and Lisbon, the report highlights the growing momentum of the Alentejo coast, including Comporta, Troia and Melides, where capital growth is reported to have reached as much as 18% by 2025. Interest in northern Portugal, particularly in areas surrounding Porto and Braga, also continues to strengthen.
According to the report’s authors, demand is expected to remain well above new housing supply. As a result, the Property Market Index forecasts that prices across Portugal’s prime residential markets could increase by a further 5.8% in 2026, reinforcing the country’s position as one of Europe’s strongest-performing property markets for a third consecutive year.
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