Lisbon Real Estate Investment: Your 2025 Property Guide

As one of the most captivating Western European capitals, the Portuguese capital city of Lisbon has cemented itself as a major tourist destination and one of the most sought-after cities for real estate investments in the world.

Property investment in Lisbon, Portugal, offers a range of property types to choose from with promising purchase price value, diverse neighborhoods to suit the needs of different buyer profiles, and attractive returns on investments. These perks make buying property in Lisbon attractive to expats and are the reasons why many choose Lisbon over other Western European capitals.

In this article on Lisbon Real Estate Investment, we’ll provide property investors with essential information concerning buying Lisbon real estate. We will explore the current state of the market, rental yields, real estate prices, rent prices, and top neighborhoods to consider buying property in Lisbon.

Lisbon Real Estate Market: An Overview

Whether Portuguese buyers and expats from the UK, USA, and other non-European countries are looking for Lisbon apartments for rent, a summer holiday apartment, or a secure villa for retirement near the coast, you will discover a variety of property options with all the charm available when buying property in Lisbon, Portugal.

The property market in Lisbon is strong, with continued high demand over the past few years, boosting capital appreciation in the area. This high demand is expected to drive up rental yields in 2025, too. The city saw record numbers of tourists in 2024, which is expected to continue to increase this year. Predictions show that tourism in Portugal is projected to increase by 9 percent in 2025.

Another trend in Lisbon’s real estate market is the rising demand for senior-friendly housing. With Lisbon’s aging population (the average age is currently reaching 45 years), there’s an increasing need for properties designed for older residents, including accessibility features and proximity to healthcare services. Catering to this demand will, in turn, boost foreign investment in retirement homes in Lisbon.

Property prices in Lisbon

The average asking price for property in the Lisbon Metropolitan Area is €4,935 per square meter, while, for Lisbon city, this rises to €6,934 per square meter. Property prices for Lisbon neighborhoods are shown in the table below.

Rental yields in the Lisbon Metropolitan Area

While the Lisbon Metropolitan Area average for rental yields is currently a high 6.8 percent, some areas will prove to be better investment options than others. In the table below, we share the latest data on current rental yields in the Lisbon metropolitan area. 

Rental yields in Lisbon’s neighborhoods

Below, you can find the rental yields for each neighborhood in Lisbon.

What types of property are available to buyers?

One of the key advantages to buying Lisbon property is the range of property types available to buyers, alongside the diversity of neighborhoods – there is something to suit the needs of any buyer.

In Lisbon, there are both residential and commercial properties to invest in. In this section, we’ll provide you with more information on some of the most common types of each.

Residential properties

When it comes to residential properties, you’ll find everything from modern apartments to luxurious waterfront properties. Some of the most common are listed below.

• Apartments: If you’re looking for a modern apartment with a pool and riverside views, or a smaller property in an up-and-coming area, you’ll find several options to consider.
• Houses: Providing more space and privacy compared to apartments, houses in Lisbon and surrounding areas can be a good investment, especially in areas with potential for rental income.
• Villas: Particularly on the Lisbon Coast stretching to Cascais, you’ll find many modern villas on the market. You’ll be able to enjoy the best of both worlds, the stunning beaches that hug the coast and the bright lights of the capital city.
• Country homes: You’ll find spacious homes a little out of the city, whilst still being within striking distance of Lisbon. Locations such as Santarém, just over an hour’s drive away, could be an excellent option to consider.
• Luxury properties: Avenida da Liberdade offers the most luxurious properties in the city. Suburbs like Príncipe Real, Baixa, and Chiado also feature luxury homes with the perk of stunning views of the River Tejo and Ponte de Abril 25 Bridge. In Greater Lisbon, Cascais and Estoril’s luxury properties are highly sought-after. Many of these properties come with private pools, gyms, and other luxury features. Our Luxury Real Estate Lisbon Guide offers more insight into upmarket properties.

Commercial properties

Some of the most popular investment opportunities for commercial property are listed below.

• Offices: Offices provide stable rental income and potential long-term capital appreciation.
• Retail spaces: Investing in retail spaces offers steady income from established businesses and potential growth in prime locations.
• Warehouses: Warehouses provide lucrative opportunities and construction costs are generally much lower. In certain areas in Lisbon, such as Marvila, many warehouses are being renovated into boutique craft beer bars and hip restaurants, for example.
• Tourism real estate: Given the booming tourism sector in Lisbon, investing in tourism real estate like hotel projects can be lucrative.

How to Invest in Real Estate in Lisbon, Portugal

If you are looking to purchase property in Portugal, the buying process in Portugal can be broken down into the following five steps.

Step 1: Decide whether you’d like to take out a mortgage to finance your property

As with buying property in any country, it is best to consider your budget as soon as possible. This will help you shortlist potential properties and determine whether you need a mortgage.

There are many banks that provide mortgages in Portugal for foreigners. The mortgage process itself can also take longer than expected, so it is best to get the ball rolling as soon as possible.

Step 2: Find the perfect property

When searching for your property, it’s advisable to work with a buyer’s agent or local real estate agent who understands the market and can provide insights on high-demand areas. While online listings can be a great starting point, many of the best deals are found through local connections and exclusive databases that only real estate professionals can provide.

Some key considerations when selecting a property include the location, property condition and size, amenities in the surrounding area, and short-term rental regulations in the area if you plan to rent out your property on platforms like Airbnb. A knowledgeable expert like a buyer’s agent at Goldcrest will be able to advise you accurately.

Step 3: Negotiation

Once you’ve found the right property, the negotiation phase begins. Unlike in some countries, price negotiations in Portugal are common, and offers are often made below the asking price.

A buyer’s agent can help assess the fair market value and advise on an appropriate offer.

Step 4: Promissory Contract (CPCV)

Once a price is agreed upon, both parties sign a Promissory Contract (Contrato de Promessa de Compra e Venda – CPCV). This legally binding agreement secures the purchase terms and typically requires a deposit of at least 10 percent of the property price.

Understanding the legal implications of buying property is crucial when buying property. We recommend working with an experienced real estate lawyer in Lisbon who will be able to guide you through the legal processes and due diligence checks.

Step 5: Sign the Escritura (Final Deed)

The final step is the signing of the Escritura (Final Deed), which officially transfers ownership to the buyer. This takes place at a Notary’s office, where both parties sign the deed.

At this point, the remaining balance of the property price is paid, along with additional costs such as Property Transfer Tax (IMT) (find out more in our property taxes in Portugal guide), Stamp Duty, and Notary and registration fees. Once the deed is signed, the property is officially registered in your name, and you receive the keys to your new Lisbon investment!

Tips for buying rental property as an investment

If you are considering purchasing foreign real estate in Portugal to rent it out and secure passive income, you should ensure that you fully understand the real estate market in the Portuguese capital city.

• Research: Thoroughly research the real estate market, rental demand, and potential rental income in different neighborhoods.
• Choose the location wisely: Select a location that offers amenities, transportation, and attractions that appeal to potential tenants.
• Get professional help: Seek guidance from a real estate agent or buyer’s agent familiar with the local market.
• Think long term: Consider the property’s long-term rental potential and its ability to attract tenants in the future.
• Be prepared for challenges: Anticipate and plan for potential challenges such as maintenance, tenant turnover, and legal requirements.
• Understand local regulations: Familiarize yourself with local rental laws and regulations to ensure compliance and avoid legal issues.
• Calculate the expected return on investment: Evaluate the potential return on investment based on property costs and projected rental income.
• Consider property management services: Assess whether hiring a property management company would be beneficial to handle tenant relations and maintenance.
• Assess profitability: Calculate potential expenses, including taxes, maintenance, and mortgage, against expected rental income.

Challenges of Buying Property in Lisbon, Portugal

With any worthwhile investment comes risks and challenges to navigate and mitigate. Keep the following in mind while making your Lisbon real estate investment:

Understanding the market

One of the initial challenges when investing in the Portuguese real estate market is gaining a comprehensive understanding of the market dynamics. It is crucial to conduct thorough research and analysis to grasp factors such as property prices, demand-supply dynamics, local regulations, and market trends.

To mitigate this risk, working with experts in the field can provide valuable insights and guidance.

Market volatility and economic influences

Investing in any real estate market involves considering market volatility and economic influences. When it comes to Portuguese real estate, make sure you understand the return-on-investment potential alongside macroeconomic factors, such as inflation rates.

Due dilligence

Due diligence can never be understated. This includes carefully evaluating the property’s legal aspects, including title deeds, permits, licenses, and potential encumbrances. Engaging a lawyer that specializes in real estate transactions can help navigate through the legal complexities and identify any potential risks or issues.

Additionally, verifying the credibility and financial stability of the seller is crucial to avoid potential fraudulent transactions or disputes.

Goldcrest: Who We Are and How We Can Help You

Goldcrest is a buyer’s agent that is based in Lisbon and the Algarve. We provide expert, impartial advice on real estate investments and how to buy property in Portugal. From scouting out the perfect property through to property acquisition, we have you covered throughout the process.

If you are looking to purchase property in Portugal, don’t hesitate to get in touch. We are here to solve all your real estate doubts, offering insightful expertise and strategic advice