Portugal’s Property Forecast: Set to More than Double the Growth of the EU, UK, and USA by 2027

Portugal experienced a 15.8 percent annual increase in house prices as of March 2025, with regions such as Lisbon, Porto, Algarve, and the Alentejo leading the way and outperforming the broader European Union (EU) property market. While the EU is forecasted to see property price growth of 4.5 percent and the UK is projected to see a 2.9 percent boost, Portugal looks set to outperform both markets in the coming year. 

Portugal Outperforming Other Global Property Markets

A recent study by Property Market-Index, a global luxury property research firm that tracks the latest trends, highlights that Portugal is doing better than ever when it comes to sustained property growth, with comparisons with the UK, EU, and USA pointing to just how well Portugal’s real estate market is currently performing.

At the end of 2025 Q1, UK house prices rose by 5.3 percent year-on-year, with US property prices increasing by just over 2.7 percent over the same time period. This is primarily due to higher interest rates and greater uncertainty of the market.

In contrast, Portugal saw a steeper rise – but why?

Why is Portugal doing so well?

Last year, Portugal saw a significant increase in foreign investments and more foreign buyers relocating to Portugal. According to the Portuguese Trade & Investment Agency (AICEP), a total of €13.2 billion was invested in foreign direct investment in Portugal in the past 12 months, which is a 19 percent increase from the year before. Of this €13.2, almost 27 percent was attributed to real estate investments, amounting to €3.5 billion.

• Foreign investors were responsible for 81 percent of Portugal’s total real estate investments in Portugal over the past year.

• Foreign residents make up approximately 12 percent of Portugal’s population, with the number of American residents increasing sevenfold since 2017.

Macroeconomic implications, such as interest rates and global socio-political uncertainty, alongside ongoing conflicts in Ukraine and Israel, have also been significant in increasing foreign interest in Portuguese real estate.

There is also general uncertainty in the geopolitical context, leading many to consider buying a property as a Plan B or seeking residency overseas. Portugal seems to be a good solution. The broad range of expats and foreign buyers looking to Portugal speaks for itself, with families, digital nomads, and retirees all relocating to Portugal.

In the wealth migration sphere, the country is also catching the eye of the wealthy– for example, Portugal is now a hotspot for UK millionaires, drawn by its strategic location, tax benefits, quality of life and climate, and accessible residency options.

Portugal is seen as a safe country to invest in and relocate to. These factors are key to Portugal’s unprecedented growth. From top to bottom of the country, you’ll find stunning luxury properties, from spacious villas in the Algarve to modern apartments in Lisbon. Compared with prices for such properties in the UK or the USA, for example, properties remain competitively priced, adding to Portugal’s allure.

What to Expect in the Coming Years

Investments in Portugal are predicted to continue to increase in the coming years. According to a recent 2024 survey by Ernst & Young, 84 percent of investors said they planned to establish or expand operations in Portugal over the next year, compared with just 72 percent for the rest of the Eurozone.

77 percent of respondents also expected the attractiveness of Portugal to improve over the next three years, compared with just 49 percent who believed this to be the case three years ago. This would overtake the Eurozone, which stood at 67 percent.

Elsewhere, Portugal’s economic growth is also predicted to outperform its European counterparts. CaixaBank Research has highlighted that Portugal’s GDP is predicted to grow by 2.4 percent in 2025.

This is higher than the Eurozone, which has a predicted growth of 0.8 to 1.3 percent. Compared with the UK, Portugal also comes out on top, with the UK Treasury’s April 2025 survey forecasting an average growth of 0.8 percent for 2025.

Which Areas of Portugal are Hot Right Now

The latest Property Market Index report ranked property hotspots in Portugal based on:

• Capital growth potential
• Robust investment opportunities
• Cultural and educational factors
• Heritage
• Land availability
• Infrastructure, connectivity, and amenities
• Health and wellbeing, sustainability, safety and security

Algarve 

The results show that some parts of the Algarve are seeing growing real estate demand, with many investors and wealthy expats choosing Ferragudo, Carvoeiro, Vilamoura, Vale do Lobo, Quinta do Lago, Faro, and Lagos. Lagos has become a firm favorite with American buyers in recent years.  

The Algarve experienced a 13.8 percent growth in property prices over the past year, with the average property price for the region standing at €4,385 per square meter, according to Portuguese real estate databank Confidencial Imobiliário.  

Property prices in the Algarve have risen by almost 125 percent between 2017 and 2024, demonstrating clearly the regions continued popularity in recent years.  

Lisbon 

It is no surprise that Lisbon remains a firm favorite with investors, with Avenida da Liberdade, Principe Real, and Lapa – luxury districts – being popular spots with affluent investors. The average asking price for property in Lisbon is €6,934, falling to €4,935 for the Greater Lisbon Area.  

Silver Coast 

The Silver Coast has been seen to be more affordable, and no less beautiful than the Algarve region. This coastline between Lisbon and Porto has dramatic beaches, quaint towns, and a high quality of life, and is predicted to experience sustained growth in the coming years.  

The Portuguese Riviera 

Cascais and Estoril on the Portuguese Riviera, and Sintra are other attractive locations for buyers. Close to Lisbon, you are strategically located close to the capital, while being able to enjoy stunning beaches, fine dining restaurants, and top international schools. The average asking price in Cascais is €7,260, due to high demand here and its reputation as one of the most sought-after luxury destinations in the world.  

Comporta 

To the south of Lisbon lies Comporta, one of Portugal’s most exclusive spots where nature and luxury combine. Affectionately known as the Hamptons of Portugal, Comporta is gaining more traction as one of the most beautiful spots in Europe, with celebrities such as Christian Louboutin and Monica Bellucci having homes here. Nearby Melides, a charming town, which embraces innovative designs that work with nature is also a top location to consider.  

Porto and Braga 

Porto, Portugal’s second city, has transformed itself into one of the best European cities for lovers of art, history, and culture. The city offers a high standard of living that remains affordable. Foz do Douro, by the coast, is a firm favorite with international buyers. It has a long promenade and is perfect for families that are looking to relocate to Portugal, while some of the best schools in Porto can be found here. 

 Elsewhere in the North, Braga, under an hour’s drive north of Porto and close to the Spanish border, is another top location to consider. Braga has become an established tech hub, with many startups and tech-driven companies relocating here. InvestBraga, the Agency for Economic Dynamization of Braga, is very forward-thinking when it comes to attracting top talent and investment to boost the regions presence on the global map, creating employment, boosting entrepreneurship, and boosting Braga’s reputation as a global technology hub.