Portugal Real Estate Market 2026: Prices, Trends & Forecast

Portugal's Residential Property Market Analysis 2026

According to a study by the EU Joint Research Center, Portugal will need around 465,000 new homes by 2035 to manage the housing shortage. Meeting this demand is expected to require about €1.68 billion in investment over the next ten years.

The Portugal property market recorded the second-largest annual increase in house prices in Europe. Values went up 17.7 percent in the third quarter of 2025, which was 5.5 percent higher than the EU average, based on Eurostat.

According to Statistics Portugal (INE), the median bank appraisal value reached €2,060 per square meter in November 2025. The number of bank appraisals increased 7.1 percent from the previous month to around 36,300, but was 2.4 percent lower than last year. In other words, fewer people are putting their homes for sale, making them more valuable.

The European Commission reported that the Portuguese housing market is among the most overvalued in the European Union, with prices estimated to be 30 to 35 percent above the EU average, creating challenges that could cause the market to evolve.

We are also expected to see increased demand in interior areas and lesser-known coastal areas, as the Portuguese real estate market diversifies, with the Alentejo, Silver Coast, and northern and central Portugal stepping more firmly into the limelight.

Which price should you trust?

When looking at Portugal house prices, it’s important to understand the difference between bank appraisals, asking prices, and transaction prices.

• Bank appraisals (such as those from INE) show the value that lenders assign to a property when assessing a mortgage. They are generally consistent and reliable, but they often lag behind market trends because banks update valuations more slowly.
• Asking prices show what sellers hope to get. These prices are usually higher than the final sale price, as sellers often leave room for negotiation. A buyer’s agent, like Goldcrest, can negotiate prices on your behalf.
• Transaction prices come from an official property market index, which shows what buyers actually pay. Since Portugal doesn’t have a single database for house prices, like the MLS (Multiple Listing Service) system in the United States, many buyers consult with a buyer’s agent or a real estate agent in Portugal. Local experts can collect information on the latest costs and market trends.

Where to Buy in Portugal (Prices by Region)

While real estate prices in many major Portuguese cities are rising, they remain more affordable compared to other Western European countries and major US cities.

In this section, we’ll provide information on what you can expect to pay for Portugal property for sale, before delving into the three main areas in greater detail: Lisbon, Porto, and the Algarve.

In the table, you can see the average asking prices for the Portuguese housing market.

Source: Confidencial Imobilario

Lisbon

Lisbon is the most expensive area in the central region for finding properties for sale. The average asking price per square meter for a home is €6,934, while for the Metropolitan Area, this falls to €4,935 per square meter.

Because it is a capital city, financial hub, and a tourist magnet, Lisbon real estate is the most diverse and the most expensive in the country.

Greater Lisbon is slightly more affordable, while the Lisbon coast also provides inhabitants a great balance between coastal and city life, making for a profitable investment with long-term value.

• Lisbon City rental yield: 5.2 percent.
• Lisbon Metropolitan Area average rental yield: 6.8 percent

If you are interested in pursuing real estate opportunities in Lisbon, make sure to comply with local laws. Consulting with a real estate lawyer in Lisbon can simplify the legalization process and document filing.

Porto

Porto real estate can be highly profitable. The average asking price per square meter in the Porto Metropolitan Area is €3,937, while in Porto City, this stands at €4,883. Areas like Gondomar and Valongo offer more affordable asking prices at €2,167 and €2,150 per square meter.

There are numerous real estate opportunities in Porto due to the more affordable prices than the Portuguese capital, yet a stable job market.

• Porto City average rental yield: 5.9 percent
• Porto Metropolitan Area average rental yield: 6.6 percent

Algarve

The second most expensive area in Portugal is the Algarve, with its beautiful beaches, natural beauty, and plenty of golf courses. Algarve real estate offers a wide array of property types, from modern apartments to spacious beachside villas.

To give you some examples, in Faro, the average house price for real estate is €3,701, while in Olhão, the average is €3,716 per square meter. In Lagos, in the western Algarve, the average property price is €5,066, while in Tavira, often referred to as the most authentic part of the Algarve, average real estate prices were €3,660 per square meter.

The average asking price for real estate in the Algarve will vary depending on the location. Keep in mind that by the coastline, you will pay significantly more, while a few kilometers inland, you will pay slightly less.

• Algarve average rental yield: 6 percent or up to 8 percent in popular tourist resorts

Not sure whether to purchase real estate in Lisbon or the Algarve? Check our ultimate guide about Lisbon vs Algarve.

Cascais & Estroil

Both Cascais and Estoril are among the most expensive areas in the Portugal housing market. Data suggests costs are well above the national average.

The average asking price in Cascais is €7,260 per square meter. Estoril is equally exclusive, commanding an average asking price of €8,389 per square meter. For many luxury buyers, a real estate investment in Cascais can be lucrative, as property values increase over time.

• Cascais average rental yield: 5 percent

Madeira

Buying property in Madeira offers strong capital appreciation, booming tourism, and stunning coastal areas.

The average asking price in Madeira varies based on the location and proximity to tourist hotspots. For example, Funchal, the capital of the island, is the most expensive, reaching about €3,574 per square meter.

However, the Portugal housing market is more affordable inland, such as in Santana, where the asking price can cost €1,560 per square meter.

• Madeira average rental yield: 4.9 percent

Silver Coast

Portugal’s Silver Coast real estate market is booming. It is a popular destination for tourists due to its rugged cliffs, rocky coastline, and beautiful beaches.

The average asking price per square meter in the Silver Coast is €2,956 in Nazaré, €2,642 in Peniche, and €3,657 in Óbidos. Each area has something unique to offer, attracting families, retirees, digital nomads, and young professionals.

• Silver Coast average rental yield: 5 to 7 percent

Alentejo

The Alentejo Portugal real estate market has one of the most affordable prices. Many budget-friendly expats and families with children choose to invest here due to its relaxing atmosphere and beautiful landscapes.

The average asking price in Alentejo is around €3,181 per square meter. However, the costs vary based on the type of property and the location. Although most of the region is quite affordable, properties can be expensive near the coast, especially in Melides and Comporta.

Which property types outperform the Portuguese property market in 2026?

In 2026, certain property types are expected to outperform the broader real estate market in Portugal because of strong demand and limited supply. These often include:

• New-build apartments with modern finishes and features that boost energy efficiency are in high demand. Buyers are drawn to these homes for their quality and low maintenance, even if they come with higher prices than older properties.
• Mid-sized urban apartments, such as one- to three-bedroom units in Lisbon and Porto, are also very popular. Their practical size and central locations make them easy to rent or sell. They are a go-to choice for young professionals, families, and remote workers.
• Luxury properties in Portugal continue to attract attention in high-end areas like Cascais, Estoril, and the Algarve. Limited supply keeps prices strong for villas, mansions, and beachfront homes, making these prime spots for investors and lifestyle buyers.
• Residential properties in smaller cities such as Braga, Setúbal, and Coimbra offer value. Country houses in Portugal and suburban homes are ideal for value-conscious buyers seeking lifestyle and affordability outside the main hubs.

What are the current real estate trends from Portugal?

Coastal Algarve towns, such as Lagos and Portimão, continue to offer attractive opportunities, especially for vacation rental properties. Smaller towns in the region can also provide strong long-term upside for strategic investors.

Suburbs of Lisbon and Porto, particularly on the south side, offer relatively high returns with lower risk. They are an excellent choice due to the diverse buyer pool, including residents and international investors.

Commercial property in Portugal is booming, with investment up 151 percent in Q1 2025 compared to the same time last year. Total investment hit €651 million, with these sectors leading the way:

• Retail: €385.5 million (59 percent)
• Hospitality: €155.7 million (24 percent)
• Offices: €88 million (13 percent)
• Logistics: €24 million (4 percent)

Overall, foreign direct investment (FDI) plays a significant role in Portugal’s real estate market. When international buyers, funds, or companies invest in property, they inject capital into the market, often targeting luxury real estate, commercial real estate, and prime urban areas.

Best Portuguese Real Estate Sites for Buying Houses

If you want to enter the Portugal real estate market, you can use major listing sites that collect data across Lisbon, Porto, and the Algarve. But if you prefer a more personalized experience, such as access to off-market properties, negotiation services, and property management for long-term rentals, a buyer’s agent like Goldcrest can offer valuable feedback.

Goldcrest: How We Can Help You 

Goldcrest is a buyer’s agent that is based in Lisbon. 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. Our team of skilled experts is available to solve all your real estate doubts, helping you with the property search and offering insightful expertise and strategic advice.

Why choose Goldcrest?

• Local knowledge: With offices located across Portugal, our presence nationwide allows us to assist you personally across the country.
• Independent service: As an independent buying agent, we do not represent any development or project. Our service is entirely tailored toward each individual client, providing you with everything you need to secure the perfect property at the best possible price. As an impartial advisor on the market, we work solely on behalf of our client and provide a service tailored to your needs and requirements.
• Streamlined process: Our real estate agents speak English and Portuguese, and our service is completely focused on providing you with a hassle-free buying experience, saving you time.
• Experienced team: Our expert real estate team has a vast local knowledge of the Portuguese property market. We have cutting-edge technology and metasearch tools at your disposal to provide full market coverage, ensuring the best investment choices and negotiated prices.
• Network of partners: We have a close network of partners, including lawyers, property management services, builders, architects, designers, and landscape gardeners, again saving you time and hassle by providing you with trusted experts in their field of work.