Updated: April 10, 2025

 

An island of paradise in the center of the Atlantic with an outstanding climate, captivating landscapes, and a thriving real estate market, Madeira has caught the eye of many investors and foreign buyers in recent years. Buying property in Madeira provides a dynamic, affordable market that can yield strong returns on your investment and high capital appreciation.

In this article, we’ll provide you with everything that you need to know about the archipelago and the Madeira real estate market, while also getting under the skin of what life is really like in Madeira.

An Introduction to Madeira

madeira real estate with poolThe Portuguese word Madeira translates as “wood”, given the ample abundance of green vegetation on the islands. The archipelago of Madeira is located 1000 km southwest of Lisbon and 700km from the African Coast. The islands include Madeira island, the spectacularly beautiful Porto Santo Islands, the Desertas Islands (three uninhabited islands), and the Selvagens Islands (three uninhabited islands and sixteen uninhabited inlets).

The islands of Madeira were discovered by the Portuguese in 1418, and the first Portuguese settled on the islands between 1420-1425. Of the eight islands, only Madeira and Porto Santo are inhabited. On Madeira Island, which has a population of 255,000 inhabitants, 75 percent of the population lives in the more climate-stable side of the country in the south. This is where the cosmopolitan capital, Funchal, is located. This city is a bag of surprises, with a wide range of diverse restaurants, coffee houses, bars, and modern shopping centers.

Currently, tourism is the main source of revenue for Madeira and, as such, you will find many luxurious lifestyle amenities, with five-star hotels, Michelin-starred restaurants, and beautiful properties with waterfront views. This leads us on nicely to why investing in homes for sale in Madeira, Portugal, can be a smart move.

Why invest in Madeira real estate?

luxury-villa-in-portugalInvesting in Madeira real estate can yield exceptional returns, with affordable properties that are likely to increase in value in the coming years. Madeira Island real estate is deservedly stepping into the limelight as one of the brightest investment opportunities in Portugal.

Madeira is a very safe island, and while Portugal itself ranks as the seventh safest country in the world in the 2024 Global Peace Index, Madeira, in particular, is known for its low crime rate.

The island’s continually growing tourism industry, which generates consistent rental income opportunities, solid infrastructure, and the fact that Madiera has become a haven for digital nomads -creating a village for remote workers- have bolstered interest in this charming island. Whether you are seeking to buy to rent short-term or long-term, investing in the Madeira, Portugal, real estate can be a lucrative venture.

Rental yields in Madeira, Portugal, vary from 4 to 8 annually, depending on the property, location, and season. Seeking expert assistance when buying property in Madeira will help you uncover the best investment options, whereby you can select proven high-yield locations.

Our article on Portugal Real Estate will inform you about everything that you need to know about the thriving property market in Portugal.

Real Estate Madeira, Portugal: Property Prices

Real estate in Madeira tends to be cheaper than in other areas of Portugal and cash buyers are in a very good position to negotiate. Prices vary depending on the pairs, with Funchal being the most expensive place to buy property on the islands – given its higher demand and abundance of services.

The average asking price for an apartment in Funchal stood at €3,230 per square meter in 2025, while other parts of the island were considerably more affordable. You will also find several luxury real estate options across the island, with many focused in Funchal. If you are seeking a fabulous modern apartment or swish villa with beautiful ocean views, Madeira can deliver.

Pitfalls of Buying Property in Madeira

When buying property in Madeira, there are always factors to consider, such as climate, transport, the structural quality of the property you wish to buy, potential legal issues, taxes, and whether all the information you have is reliable. As such, it’s important to do your due diligence and make sure that you are confident in the information you have. Working with an experienced lawyer and a real estate professional will ensure that your journey to secure Madeira property for sale is a stress-free one.

Where to Find Madeira Real Estate

So, where is the best place to buy property in Madeira? As we’ve mentioned, Funchal is definitely the place to find luxury Madeira houses and properties on the island and is the most developed part of the island. Here you will find fine dining, five-star hotels, and a marina. As the weather is more stable here, this is where the bulk of the development and properties are located. Funchal is not only the prime tourist destination but also the political and economic center of the islands.

Santa Cruz, Câmara de Lobos, and Machico are also good locations, where you will be able to find beautiful villas for sale in Madeira.

The best places to live in Madeira, Portugal, will largely depend on what you are looking for, as some parts of the island will be much quieter than others. If you would like some more information on where to find houses for sale in Madeira, Portugal, that fit your criteria, please get in touch with us today.

 

Madeira Real Estate: Practical Information

Madeira Island is perfect for expats looking to escape to paradise. The relaxed pace of life, the multitude of activities, and the incredible food scene are just a few of the reasons. For investors, the strong potential for Portugal luxury real estate investments is also an exciting opportunity.

GC-ICON-32Lifestylemadeira real estate

An active lifestyle is basically synonymous with Madeira. You constantly have an array of things to do around you. From hiking, yoga, diving, and golf, there are many things to keep you occupied. Living in Madeira day-to-day, you will quickly come to pick up a relaxed routine, living completely stress-free. The islands have a rich culture, with museums, music festivals, and art exhibitions. Keen surfers should also know that the island is a great place to live, with great waves at Ponta Pequena, Paul do Mar, and Fajã da Areia, amongst others.

Alongside the cultural delights and activities, the cuisine of Madeira is very good. It is no surprise that seafood and fish dishes take center stage. However, alongside this, you have very good meat, fruits, and vegetables. Try the espetada (grilled meats or fish on a skewer) that are particularly good. Or the lapas (limpets), which are a specialty of Madeira, and a must-have if you like seafood.

The small size of the islands makes getting around very accessible. In under an hour from Funchal, you can explore the wild north of the island and the picturesque town of Porto Moniz. Or traveling east, you can reach the splendid village of Jardim do Mar, entrapped in the mountains and with the Atlantic Ocean spread out before it.

The second inhabited island, Porto Santo is a true wonder, with nine kilometers of pristine white beaches. If you are looking to unwind completely, then this is the place for you. The ferry across from Funchal takes around two and a half hours and allows you to see the Atlantic Ocean up close.

There is a booming luxury market in Madeira. You can expect to find all the amenities that you would expect to find in New York, Paris, or London. There are seven Michelin-starred restaurants in Madeira, offering spectacular dishes that are continually pushing the boundaries.

GC-ICON-06Retiring in Madeira

For retirees, the islands are perfect. With a strong expat population, you will not be overwhelmed by a completely unfamiliar culture. English is also widely spoken on the islands and there are good healthcare facilities on the islands. If you are a Portuguese resident, you will also have convenient access to the National Health Service (SNS) of Portugal and need only pay small costs for treatment. This is free for over 65-year-olds.

apartment iconHealthcare in Madeira

Madeira has good healthcare and there are many health centers located around the island of Madeira and one in Porto Santo. There is also the Dr. Nélio Mendonça Hospital on Madeira island. Some are equipped with emergency service facilities. With the fourth-best doctor-to-patient ratio in Europe, you have one of the best healthcare systems in Europe.

Education in Madeira

Madeira has a good education system. There are two good international schools – the International School of Madeira and the International Sharing School of Madeira. Fees will vary depending on the school.

GC-ICON-49Transport in Madeira

Madeira has an extensive public transport system. However, the best way to get around the islands is by car. There is also a ferry that runs between Madeira and Porto Santo.

icon-01Climate of Madeira

Madeira has a temperate climate, regularly described as experiencing four seasons in a day. The islands enjoy balmy weather because of their geographical location and mountains – the only flat part of the island is the airplane runway. Madeira has moderate humidity and average temperatures standing at 25 Degrees C (77 Degrees F) in summer and 17 Degrees C (63 Degrees F) in winter. Indeed, while much of continental Portugal experiences colder winters, those lucky to live on Madeira can be seen in summer attire.

The climate is one of the reasons why most of the development is focused on the south coast of Madeira island. Here the climate is generally more stable. The annual average air temperatures are also higher on the southern coast and fall as you move inland in parallel to altitude. Rainfall is also higher on the northern coast than on the southern coast.

Goldcrest: How We Can Help

As the first buyer’s agent in Portugal, Goldcrest has helped hundreds of international families and investors snap up their dream home in Portugal.

Properties displayed on real estate listing websites don’t give you a full picture of the available properties on the market. With local insights and access to real estate listings you will not find elsewhere, including off-market properties, we are your go-to real estate professionals to secure the property at the best possible price.

From scouting out your ideal property to acquisition and beyond, we are by your side throughout your buying journey. Offering more than real estate services, we provide a service tailored completely to your unique requirements. 

Contact the team to speak with a real estate professional today. We will provide you with tailored advice focused on what you are looking for, including market data relating to the property and whether the selling price can be deemed reliable. 

A significant advantage of using a buyer agent is that they will have convenient access to real estate listings and data relating to the property that you will not find elsewhere. While brokerage firms or a real estate agent in Madeira will gain a commission from the seller, as a buyer’s agent, we work solely on behalf of you, the buyer.

Frequently Asked Questions about Madeira Real Estate

The best place to buy real estate in Madeira is the capital, Funchal, which has the most developed luxury market.

Real estate in Funchal has some excellent properties and is a hot property market at the moment. With this in mind, if you are seeking a more peaceful environment, be sure to explore other parts of the island, such as Santa Cruz and Moschino. 

Madeira is a very safe investment opportunity. The island has increased demand and cheaper properties than in many places in continental Portugal, with high rental yields of around 4-8 percent. 

Madeira is a brilliant location to retire to. There are beautiful properties, many of which have a sea view, bright natural light, and a relaxed way of life. The temperate climate and world-class healthcare options are other key reasons to consider retiring to Madeira. 

There are some things to be aware of when purchasing any property, and in Madeira, this is no different. Some of the factors that you should take into consideration are microclimates, walkability, and the structural quality of the property you wish to buy, alongside potential legal issues, taxes, and whether all the information you have is deemed reliable. Ensure you have all the data relating to the property before you buy, and work with experienced real estate experts and a property lawyer. 

Yes, foreigners will have no restrictions buying property in Madeira and will have the same rights as Portugeuse citizens. 

It is not expensive to live in Madeira. Living in Madeira is quite affordable and is cheaper compared to some other big cities in Portugal. For example, consumer prices, including rent, are almost 16 percent lower in Funchal than in Lisbon, excluding rent. 

There are countless reasons to buy property in Madeira, Portugal. With an exceptional all-year-round climate ideal for staying active throughout the year, its very own Digital Nomad village, lucrative property investment options, and a high quality of life, Madeira is one of the best places in Europe to snap up your dream home.

Yes, Americans can move to Madeira, Portugal, provided they have a valid residence permit, with options including the Golden Visa, D7 Visa, and Digital Nomad Visa. Living in Madeira provides American expats with a high-quality lifestyle with excellent healthcare, education, and infrastructure, making it a standout location in Portugal.

Properties displayed on real estate listing websites don’t give you a full picture of what is available. Working with a buyer’s agent will provide you with full market access and off-market properties. Plus, a buyer’s agent works solely on behalf of you, the buyer, ensuring you secure your dream home at the best price possible.

At Goldcrest, we provide a service tailored completely to your unique requirements so that you can have peace of mind you have explored all avenues when finding the best Madeira houses. 

You can discover more in this exclusive chapter of our new e-book Your Expert Guide to Buying Property in Portugal that you can download for free right now.
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