Portugal Leads Global House Price Growth, Rising 15.2% Despite Worldwide Decline
Against the backdrop of a broader slowdown in global real estate markets, Portugal’s residential property market continues to follow a markedly different trajectory.
According to the latest data from the Bank for International Settlements (BIS), real residential property prices in Portugal rose by 15.2% year-on-year in the first quarter of 2026, the highest increase among the 57 economies tracked by the BIS.
North Macedonia ranked second with an increase of 12.5%, followed by Bulgaria at 10.8%. Meanwhile, global real residential property prices fell by 1.2% over the same period, compared with a decline of 0.5% in the fourth quarter of 2025.
The BIS figures for “real house prices” are adjusted for inflation, providing a clearer picture of changes in the real value of residential property. In nominal terms, without adjusting for inflation, global house prices increased by 1.7% over the same period.
Portugal’s Growth Far Exceeds the European Average
Across the world, the divergence between different real estate markets is becoming increasingly pronounced.
In the first quarter of 2026, real house prices in advanced economies declined by 0.2% year-on-year, while emerging market economies recorded a 2% decrease. Some major property markets experienced more substantial corrections, with real house prices falling by around 7% in both China and Canada, and by approximately 2% in the United States and the United Kingdom.
By comparison, Europe’s property market remained relatively resilient. Real residential property prices in the euro area increased by 2.6% year-on-year, with Spain recording growth of around 10% and Italy approximately 4%.
Portugal’s 15.2% increase not only ranked first among the 57 economies monitored by the BIS, but also significantly exceeded the overall euro area growth rate.
This performance further highlights the growing divergence between Portugal’s residential property market and many of the world’s major real estate markets.
Supply-Demand Imbalance Remains a Key Market Driver
Housing shortages remain an important factor behind Portugal’s continued rise in property prices.
In recent years, major markets such as Lisbon, Porto and the Algarve have continued to experience demand from local households, international residents and investors, while the pace of new housing supply has struggled to fully keep up with growing demand.
The latest data from real estate platform Idealista also show that, by the end of August 2026, the median asking price for residential property in Portugal had reached €3,207 per square metre, up 7.5% year-on-year.
In Faro, residential asking prices increased by 18.3% year-on-year in August, the highest growth rate among Portugal’s district capitals and autonomous-region capitals.
It is important to note that Idealista tracks asking prices, while BIS data are based on residential property price statistics. The two indicators use different methodologies and are therefore not directly comparable. Nevertheless, both point to continued price pressure in Portugal’s residential market.
Increasing Housing Supply Becomes the Next Key Challenge
In response to persistent pressure on housing supply, the Portuguese government is introducing measures aimed at encouraging residential construction. These include plans to apply a reduced 6% VAT rate to qualifying construction projects, alongside reforms intended to accelerate planning and licensing procedures and shorten development timelines.
However, it will take time for these measures to translate into new homes entering the market. Land planning, administrative approvals, construction costs, financing conditions and building timelines can all affect the pace at which additional housing supply becomes available.
As a result, the imbalance between housing supply and demand in Portugal may persist in the short term.
From a longer-term perspective, Portugal’s strong house price growth at a time when many global property markets are undergoing adjustments largely reflects the persistent imbalance between local housing demand and available supply.
Reference link: https://www.theportugalnews.com/news/2026-09-02/portugal-leads-global-house-price-rise/1079928
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