Lisbon Luxury Real Estate Market Claims 4th Position with Greatest Potential for Appreciation in 2025

Lisbon reinforces its position as one of the very best cities in the world to invest in luxury real estate. The Portuguese capital ranks in 4th position in a recent ranking of European cities with the greatest potential for appreciation in 2025.

Lisbon’s Luxury Market Projected to Rise by 4.5 Percent in 2025

Property for sale in Lisbon is projected to register a growth of 4.5 percent in prices of luxury homes, according to the report “2025 European Prime Price Forecast” from Knight Frank. Lisbon is expected to surpass European cities such as Monaco, Milan, Paris, and Geneva, each key luxury property hotspots in Europe.

In first place is Stockholm, which has an expected growth of 6 percent. This is followed by the two Spanish cities of Marbella and Madrid, both of which have an expected growth of 5 percent. However, it is worth bearing in mind that despite the projected Lisbon luxury market price rise, the Portuguese capital remains relatively affordable compared with luxury properties in other key cities in Western Europe. 

What factors are contributing to Lisbon’s sustained growth?

Lisbon’s continued market and price growth, which has seen increased interest in luxury properties in recent years from foreign buyers – such as it being one of the top three for luxury properties in the world – is driven by an array of factors, including: 

• Safety: Portugal is considered one of the safest countries in the world, ranking in 7th position in the 2024 Global Peace Index, with Lisbon also being noted as one of the safest cities.
• Sublime climate: With more than 300 days of sunshine per year, the climate is a key driver to expats and tourists heading to Portugal, with expected tourism growth of 9 percent this year. 
• Political and economic stability: Portugal is a stable parliamentary democracy with a multiparty political system. The country has progressive legislation and is welcoming of foreign property buyers. Alongside this, Portugal has a growing economy, with many international companies and startups relocating to Lisbon, Porto, and Braga. 
• Quality of life: Lisbon boasts a high quality of life, based around affordably, embracing a good work-life balance, and excellent education and healthcare systems. Portugal ranks in 6th position in the Quality of Life Index by Global Citizen Solutions, which takes into account metrics such as environmental sustainability, the cost of living, infrastructure, and personal and political freedoms.
  

Does the future remain bright for Lisbon?

Given the increased interest in foreign buyers and the influx of foreign investment coming into Lisbon, driven by attractive investment opportunities, we can safely say that the Lisbon property market will remain firmly on the radar of major foreign investors in the coming years. This is not only the result of political stability in Portugal but also due to the positive growth of the economy, high interest rates – averaging at 6.8 percent for the Lisbon Metropolitan Area – and the attractive lifestyle that you will find in the Portuguese capital. The climate, the fact that English is widely spoken, and safety add layers to the appeal of living in Lisbon.

Buying property in Lisbon has become increasingly popular with investors from across the globe. The opening up of new air routes, in particular those connecting Portugal to the USA, has diversified demand and attracted a steady and significant flow of investors into the country each seeking to get on the Lisbon property market ladder. Alongside American nationals, investors from the UK and the Middle East are increasing in number.

Lisbon and Porto Remain Top Investment Hubs

The luxury real estate sector in Portugal is thriving, with Lisbon, the Algarve, and Porto, at the forefront of this trend in the country. Portugal is projected to experience a 5 percent increase in revenue in the prime segment of Portugal in 2025, with the two largest cities in the country, Lisbon and Porto, identified as prime investment areas for the Portuguese real estate market. Interest is also increasing in the outskirts of these two cities, with projects in the pipeline to increase the attractiveness of the metropolitan region.

The increasing trend in foreign investors seeking luxury properties in Portugal, and in particular, Lisbon and Porto has had a positive impact on the two cities, the country as a whole, and – on a larger scale – Europe’s luxury real estate market. The cities are dynamic and promising for investors and demanding buyers seeking exclusivity and high-quality luxury properties to look their way.

Find Your Oasis of Calm in Lisbon

If you are seeking an excellent investment prospect or are even looking to relocate to Lisbon, we can help you discover the perfect property for you. For example, Varandas Living, nestled close to the most prestigious neighborhood of Lisbon, Avenida da Liberdade, is the epitome of timeless aesthetics and luxury living in the heart of Lisbon. Comprising 12 carefully designed apartments with T1, T2, and T3, Varandas Living caters to modern living standards.

The residence offers balanced spaces that can be customized, emphasizing open environments, home offices, and communal areas for young families. However, these residences are more than simply a residence, but are redefining urban living, focusing on convenience, comfort, and modern designs.