Portugal Luxury Real Estate Resists Uncertainty

Portugal’s luxury real estate market is proving to be resilient in resisting global uncertainty and volatility that has plagued other property markets across the globe. Portugal luxury real estate resists uncertainty and continues to register an increase in demand in 2025.

Record Start to 2025

Against the backdrop of increased global uncertainties and political changes, where many property markets have faltered, Portugal’s property market has shown itself to be robust and resilient.

In the first five months of 2025, a recent study by Sotheby’s International recorded a 34 percent increase in the number of property transactions carried out compared to the same period in 2024.

While Portuguese buyers accounted for about 50 percent of these transactions, interest from international buyers continues to fuel demand.

• UK buyers accounted for 11 percent of transactions.
• US buyers accounted for 9 percent of transactions.
• Brazilian buyers accounted for 6 percent.

Demand for Portuguese property amongst foreign buyers is fuelled by the country’s warm climate, investment opportunities, quality of life, and accessible residency options. There are also no restrictions on foreign buyers purchasing property in the country.

Why does Portugal's property market remain so popular with foreign buyers?

Portugal started to stand out as a prime destination amongst real estate buyers a few years ago, highlighted by price increases in several key locations. Today, Portugal has cemented its position as having one of the most robust and appealing property markets in the world.

In the global context, Portugal’s property market is predicted to outpace that of the EU, UK, and USA until 2027, with the luxury sector now particularly sought after.

There has been a positive outlook in each key area of Portugal, with each showing increased interest from buyers that is driven in part by the increase in the value of the properties. From an investor’s perspective, these areas can be seen as offering exceptional long-term value.

• Lisbon
• Cascais
• Estoril
• Oeiras
• Porto
• Algarve
• Madeira

Lisbon

Lisbon was elected as the second most luxury destination in the world, according to Condé Nast Johansens, with the city attracting visitors and buyers from across the world. In Lisbon, domestic and foreign demand is more balanced than in Porto, with current preferences being properties that have outdoor spaces and are centrally located, or emerging areas, such as Marvila.

Porto

Porto has seen demand driven by North Americans, Brazilians, and French buyers, many of whom enter the Portuguese property market through purchasing 1 and 2-bedroom luxury properties in the historic center of the city, with many then purchasing larger and more expensive homes or apartments thereafter. Properties in Porto are only going to rise in value over time.

Algarve

In the Algarve, new air routes between Faro and the USA have contributed to growing interest from US buyers. Alongside this, the high quality of life, affordable cost of living, warm climate, and stable political system in Portugal are other factors fuelling American interest in Portugal.

Madeira

Funchal, Madeira’s cosmopolitan capital, has excellent infrastructure, great amenities, and stands out as a good option for property investments. Families and citizens from the USA and Northern Europe who seek security, a relaxed pace of life, and a mild climate are increasingly choosing Madeira as a viable living or investment option, with strong potential for consistent appreciation.

What does the future hold?

Looking to the future, the real estate sector looks poised to continue building on its upward trajectory. Property prices continue to rise in key parts of the country, with initiatives to boost construction by the Portuguese Government looking to alleviate limited supply and counter the housing crisis in high-demand areas in the country. According to the National Statistics Institute (INE), production in construction has experienced a 2.1 percent year on year increase.

While some real estate markets, such as the UK, are experiencing significant problems, confidence in Portugal’s real estate market, solidified by its strong track record over the past few years, has led to demand for properties in Portugal remaining strong.

From strong rental yield potential across the country and the fact that there are no restrictions on foreign buyers, to its wide range of residency options, making relocation quite straightforward, Portugal looks set to stand strong in the coming years.

Property Investors Confident in Portugal's Property Market

Confidence in the Portuguese real estate market is high, with demand from domestic and foreign buyers leading to an increase in the number of transactions, but also an increase in the average value of the properties that are being sold.

This underscores the robustness of Portugal’s real estate market. In today’s continually shifting and unpredictable geopolitical climate, many buyers are seeking out luxury property as a Plan B to safeguard their wealth, but also as a gateway to a higher quality of life. They’re seeking out destinations that combine investment potential with strong infrastructure, personal safety, and long-term stability for their families. And Portugal delivers on all fronts.