Sales Market

Updated in May 2025
The residential market in Portugal began its recovery in 2014, following the Global Financial Crisis (GFC) and subsequent economic challenges. This resurgence was characterized by the renovation of numerous buildings, particularly in the city centers of Lisbon and Porto. Legal and fiscal reforms, including the overhaul of the Urban Lease Law and the introduction of a new Urban Renovation Regime, which reduced VAT from 23% to 6%, attracted significant interest from developers and investors.
The implementation of the Non-Habitual Residents Tax Regime and the Residence Permit for Investment Activity ("Golden Visa") further stimulated demand from foreign buyers, with the French, British, and Brazilians emerging as the predominant purchasers.
Key residential market volumes | Portugal nationwide
The increase in housing prices is a widespread phenomenon all throughout Europe, driven by persistent supply constraints and rising demand. However, the dynamics behind this imbalance vary significantly across countries. A key driver of this trend is demographic pressure, is the population growth driven mainly by migratory balances, which has intensified affordability challenges as demand continues to rise without a proportional expansion in the housing stock.
Portugal currently stands out with the highest house price index increase of the benchmark set. Portugal’s house price index has more than doubled in the past ten years and shows signs of acceleration, hinting at sustained fundamentals of supply scarcity for the growing demand.
European Countries House Price Index

Prices kept their growth trajectory, and the residual downfalls were based on price adjustments due to a weakening of the sales market driven by the high-interest rate environment. In Q4 2024, the HPI increased by x% (x percentage points referring to the growth variance of the homologous period in the previous year).
Portugal House Price index
Source: INE
The expansion of development into an increasing number of councils beyond Lisbon and Porto is evident. Over the years, there has been a deceleration in residential prices within the cities and an increase in the peripheral areas. This phenomenon is observed in both major cities, Lisbon and Porto, reflecting the rise of a new type of demand that opts for lower prices while maintaining proximity to the urban centers.
Evolution of residential prices per dwelling in Portugal

Furthermore, the amendment of the Golden Visa program at the beginning of 2022, which excludes housing purchases in high population density zones, has created opportunities for the development of projects in low population density zones such as Comporta, Douro, and Alqueva, and for the regeneration of historic centers in the country's inland regions. However, in July 2023, the Portuguese Parliament approved further changes to this program, deciding that no more golden visas will be granted.
In addition, in October 2023, the Parliament approved the "Mais Habitação" program (Law No. 56/2023), introducing several legislative changes in housing. One of these measures is the cessation of new golden visas in the most common forms, allowing new visas only under specific conditions. Additionally, it remains possible to renew existing visas.
Moreover, in the rental sector, a limit has been set on the initial rent for new residential rental contracts, and contracts prior to 1990 cannot be transferred to the New Urban Rental Regime (NRAU). There is also a new measure that defines the forced rental of certain properties (outside the interior of the country) that have been vacant for more than two years.
Another measure of the "Mais Habitação" program pertains to Alojamento Local (short-term rental), with the main one being the suspension of new licenses for apartments in autonomous fractions, unless they are located in the interior of the country or in the autonomous regions.
LISBON RESIDENTIAL MARKET
The Lisbon Metropolitan Area (LMA) includes the city of Lisbon and the neighboring councils, comprising a total of 18 councils, divided between the north and the south bank of River Tagus. Lisbon council concentrates more than one fifth of the houses of the metropolitan area (21%), followed by Sintra (12%), and Cascais, Loures and Almada (all with 7%). In the last decade (2011-2021), Seixal and Odivelas saw the highest construction volume (13% of total new homes), followed by Mafra and Lisbon (7%).
Lisbon Metropolitan Area

Construction in the Greater Lisbon area increased significantly until Q2 2023. The impact of COVID-19 was not particularly felt in the market for new family housing, only recording a slight decrease during this period. However, after Q2 2023, a decline in construction activity was recorded. Despite this, a gradual recovery is now being witnessed, with new housing projects picking up pace and addressing the rising demand for family homes in the region.
New Houses in greater Lisbon area
Source: INE
Over the years, the number of houses sold in the greater Lisbon area has experienced significant fluctuations. Despite these variations, the overall trend indicates a robust housing market, with sales volumes reaching high levels in recent years. This reflects a dynamic market responding to economic factors and consumer demand.
The average value of houses has shown a consistent upward trend, indicating increasing property prices. This rise in average values suggests strong demand and a growing preference for higher-value properties. The combination of these factors highlights the evolving nature of the housing market in greater Lisbon.
Units Sold in Greater Lisbon
Lisbon City Residential Zones
Lisbon City Residential Zones

The city of Lisbon is divided into 24 parishes. Lapa and Restelo have long been recognized as the most affluent neighborhoods, known for their prestige and high social status. Chiado, Príncipe Real, and Avenida da Liberdade have risen in prominence due to their scenic views and elegant buildings, making them highly desirable to foreign buyers and among the most expensive areas in the city.
According to the 2021 Census, Lisbon had 320,000 homes, reflecting a 2% decrease in housing stock from 2011 to 2021 due to weak development activity. Although residential construction began to recover in 2014, it focused mainly on small-scale renovations in the city center. However, according to Confidencial Imobiliário, new build properties have been on the rise since 2019, with a significant increase from 7,327 to 11,223 in 2023. This number recently dropped in 2024 to 9,149, marking a decrease of 18.48%. Following this trend, average prices increased from 2019 to 2023, ranging from €3,763/sq m to €4,946/sq m. The year 2024 marked an average sale price of €4,797/sq m.
Just as in 2023, in 2024 the parish with the highest average selling price is Santo António, followed by Avenidas Novas. Completing the podium in 2024 is Estrela, which has overtaken Parque das Nações, now in the 8th position.
PORTO RESIDENTIAL MARKET
Porto Metropolitan Area (PMA) includes the city of Porto and the neighboring councils, comprising a total of 17 councils, divided between the north and the south bank of Douro River. Porto and Vila Nova de Gaia (“Gaia”) combined concentrate more than one third of the houses of the metropolitan area (17% each), followed by Matosinhos (10%) and Gondomar (9%).
Porto Metropolitan Area

The number of new dwellings in the Northern region has shown a general upward trend. Despite some fluctuations, the overall increase indicates a growing market for new family housing. This trend reflects the rising demand for residential properties in the area, driven by various economic and demographic factors.
Similar to Lisbon, The Northern region did not experience a decrease in housing supply during COVID-19, but rather a slight decline. COVID-19. The market pressure for housing continues to grow, highlighting the need for ongoing development to meet the demand for family housing in the Northern region.
New Houses in North Region
The number of houses sold in the Northern region has shown a significant upward trend over the years. From the low point in early 2013, the market has grown substantially, reaching a historical peak in mid 2021. The average value of houses has also risen consistently, indicating a robust market with increasing property prices.
Houses Sold in North Region
Source: INE
Porto City Residential Zones
Porto City Residential Zones

Porto recorded a strong level of construction growth at the beginning of the century. However, according to the latest Census, there were 133 thousand homes in Porto in 2021, reflecting a decrease of 3% over the last decade.
From 2011 to 2017, the construction of new houses radically dropped from 6,759 units to 1,409. In 2018, a recovery trend began, which continued until 2024. It is worth noting a resistance in this trend in 2022, with a drop of 14% year-on-year compared to 2021. In 2024, 7,388 new houses were built, marking a substantial increase of 27.5% compared to 2023.
Regarding sales, there was a fall from 7,000 homes in 2000 to 3,000 in 2012. An increase began in 2013, with high growth recorded since 2015, achieving 7,703 units sold in 2018. However, a decrease was observed in 2020. From 2020 to 2024, the trend showed fluctuation, especially in 2022 and 2023, with 2023 recording the smallest number of housing sales in the post-pandemic era. In contrast, 2024 recorded 6,807 units sold, marking an increase of 19% compared to 2023.
Regarding prices, it should be noted that since 2010, the average selling price has shown an upward trend. It stood at €2,210 per sqm in 2019, and in 2024, it reached €3,256 per sqm.
Rental Market
Updated in May 2025
The Private Rented Sector (PRS) in Portugal remains underdeveloped. In the early 21st century, the rental market experienced a decline due to strong incentives for home ownership, including tax benefits, low interest rates, and high loan-to-value ratios. This was further exacerbated by prolonged periods of stringent rent controls. However, significant amendments to lease laws in 2012 and a substantial increase in house prices have reversed this trend. By 2019, the PRS had expanded to encompass 26% of households, up from 20% in 2011. It is anticipated that this trend will continue, influenced by various macro trends such as increased flexibility and mobility, later ages for marriage and first childbirth, and the scarcity of affordable housing, among other factors, which are reshaping living arrangements.
As a way to cope with increasing inflation, the Portuguese Government announced a cap of 2% on rental updates for 2023, applicable to both residential and commercial contracts. This measure aims to mitigate the impact of inflation, which would have led to a rental increase of 5.43%, based on the 12-month inflation rate up to August. To compensate landlords for this limitation, the government introduced tax benefits, including exemptions ranging from 9% to 30% on rental income for IRS and 13% for IRC. However, these benefits do not cover all rental contracts, excluding those signed in 2022 and affordable housing agreements.
There is not yet a multifamily housing (MFH) investment market in Portugal, although a few large size residential portfolios have been sold, since 2017. These include the transactions of Tranquilidade and Fidelidade insurance companies’ portfolios as well as the sale of five residential investment funds (FIIAH), which totalized more than €800 million.
LISBON RENTAL MARKET
Over the last years, Lisbon city has benefited from urban regeneration. As part of this, several buildings were renovated and sold as high-end apartments. Some were used as short-term rentals with demand from booming tourism. Very few projects have targeted the traditional rental market, driving a significant scarcity of houses available for rent. However, the pandemic led many tourism accommodations to be transferred to the conventional rental housing in Lisbon city what resulted in a 19% increase on number of new rental contracts in 2020 and a 23% increase in 2021. In 2022, were recorded 8,375 new rental contracts in the city. The recent years shows a slowdown in the rental market in Lisbon as 2023 recorded 6,383 contracts and 2024 recorded 6,655, this makes a 20,5% decrease if we compare 2024 versus 2022.
The scarcity of supply has driven up rents across all councils in the Lisbon Metropolitan Area. Over the past five years, the overall average rent in the LMA has surged by 44%, rising from €12.5/sqm/month in 2019 to €12.8/sqm/month in 2020, €12.6/sqm/month in 2021, €13.7/sqm/month in 2022, €17.1/sqm/month in 2023, and €18.0/sqm/month in 2024. Lisbon city continues to command the highest rents (€20.5/sqm/month), followed by Cascais (€20.1/sqm/month) and Oeiras (€17.2/sqm/month). From 2023 to 2024, Moita (17.4%), Mafra (15.9%), and Sesimbra (15.1%) were the councils that recorded the most significant increases in average rent prices.
The prospects for multi-family housing (MFH) are substantial, particularly given the historically low development of rental properties over the past decades.
PORTO RENTAL MARKET
Much like Lisbon, Porto has experienced significant urban regeneration in recent years, with numerous buildings being renovated. However, developers have predominantly focused on the sales market or tourism accommodations, leading to a scarcity of rental properties and, consequently, an increase in rental prices.
The average asking rent value in the Porto Metropolitan Area has increased by 77% between 2019 and 2024, reaching €15.1/sqm/month. This trend has been observed across all councils. The councils of Póvoa de Varzim (90.9%), Vila Nova de Gaia (88.6%), and Vila do Conde (84.7%) recorded the highest growth in average asking rent values since 2019. From 2023 to 2024, the councils of Valongo (19.28%), Espinho (19.19%), and Vila Nova de Gaia (12.82%) recorded the highest growth in average asking rent values.
Porto has strong potential for the development of the MFH sector, with growth likely to be faster than in Lisbon due to cheaper land sites and municipal programs such as Porto com Sentido, which aim to promote the build-to-rent sector.
Residential Tourism
High quality and prestigious projects have been developed in Portugal; the majority anchored on golf courses. Three of the most established and recognized tourism regions are the Algarve and the Lisbon North and South Coasts.
Main Residential Tourism Zones

Algarve
In the Algarve, the renowned Golden Triangle area boasts some of Europe's most prestigious developments: Quinta do Lago, Vale do Lobo, and Vilamoura, with the latter two still offering significant potential for expansion. The Algarve attracts a diverse range of tourists, including those seeking luxurious beach resorts, golf enthusiasts drawn to its world-class courses, and adventure seekers looking for water sports and scenic hiking trails. The region's stunning coastline, favorable climate, and vibrant nightlife make it a prime destination for both relaxation and recreation.
Following several years with no investment in the region, we are now observing a revival in tourism development with several projects under construction. Top quality real estate can achieve up to, and even upwards, of €10,000/sq m in new homes.
Lisbon North Coast
While not yet as established as the Algarve, the Lisbon North Coast is emerging as a promising real estate destination near Lisbon, with several golf courses serving as the foundation for projects in this region. Currently, there are several resort developments available, including Praia d’El Rey, Campo Real, Bom Sucesso, Royal Óbidos, and West Cliffs (by Praia d’El Rey). Except for Bom Sucesso and West Cliffs, all other resorts feature 5-star hotels, some of which are managed by international chains such as Marriott and Dolce. It is noteworthy that a significant number of families reside year-round in the Lisbon North Coast resorts, particularly in Praia d’El Rey and Campo Real.
Lisbon South Coast
The Lisbon South Coast, internationally renowned for the village of Comporta, is situated south of the Sado River, less than an hour's drive from Lisbon, and is largely integrated into the Alentejo region. This area boasts dune-protected, white sandy beaches stretching an impressive 60km from Troia to Sines. As part of the Natura 2000 Program, it remains one of Europe's last unspoiled coastlines and is undoubtedly one of the continent's premium tourism destinations with significant development potential.
The region features seven major tourism resorts, including Troia Resort, Pestana Troia Eco-Resort & Residences, Herdade da Comporta, Pinheirinho Golf & Beach Resort, Muda Reserve, Club Med, and Costa Terra. Additionally, several smaller high-quality projects, such as Sublime, Melides Art, and Comporta Retreat, enhance the area's appeal. These developments are at various stages, with current asking prices ranging from €5,000 to €8,000/sqm.
Student Housing Market

Updated in May 2025
In an increasingly globalized world, studying abroad is becoming more commonplace. Portugal, with several universities ranked among the top 500 globally, lower tuition and accommodation costs, and a high quality of life, is well-positioned to attract international students.
In recent years, the number of international students has been on the rise, offsetting the stabilization in domestic student numbers. Between 2014 and 2019, the influx of international students doubled, with an average annual growth rate of 16%. By 2019, 60,679 international students were enrolled in Portuguese universities, making up 15% of the total student population.
Although the number of international students decreased in 2020/2021 due to Covid-19, it has been increasing since then, reaching a new record of 70,941 in 2022/2023. In the 2023/2024 academic year, Portugal achieved a new milestone with 73,339 international students enrolled in higher education. This significant increase underscores Portugal's growing appeal as a destination for international students, reflecting the country's dedication to providing high-quality education and fostering a diverse academic environment.
International students
Source: DGEEC (Direção-Geral de Estatísticas da Educação e Ciência)
Over the past three years, the total number of students has experienced a compound annual growth rate (CAGR) of 4%, while international students have grown by 6% annually. Students prioritize safety, modern buildings, and a sense of community, which is why Purpose Built Student Accommodation (PBSA) is generally preferred over renting a room in the regular Private Rented Sector (PRS) market.
The current stock is far from sufficient to meet demand. Portugal has approximately 9,500 PBSA beds, with an additional 4,200 beds expected to be available within the next two years. The current provision rate, which is the proportion of beds per student, stands at 2.1%, compared to the European average of 13%. Moreover, the majority of beds (85%) are concentrated in Lisbon and Porto, reflecting investor preferences in this sector.
Data indicates that PBSA in Portugal has a very rapid ramp-up period, with operators achieving an average annual occupancy rate of 97% within 12 to 16 months. Additionally, prices have been consistently increasing, largely influenced by location and the amenities offered. Currently, net operating income margins range between 70% and 80%.
Senior Living
Updated in May 2025
The increasing longevity, the growing proportion of elderly individuals living alone, and the evolving needs of new generations necessitate various social and cultural changes. These changes must focus on pensions, policies, social services, health, and long-term care. This also includes developing new residential models that can meet the aspirations of these generations as they enter old age.
Population aging is a significant issue across Europe, but it is particularly pronounced in Portugal. Projections suggest that by 2050, Portugal will have the highest proportion of elderly people (35%) in Europe, with a dependency ratio indicating that there will be only one and a half working-age individuals for every elderly person.
Population aged 65 and above

According to the World Health Organization, the supply of beds in homes for seniors should correspond to 5% of the elderly population. Considering that Portugal currently has an elderly population in excess of 2,400 thousand and about 102,000 beds in nursing homes, this represents an immediate deficit of approximately 20,000 beds; and in 2050 a total of 170,000 beds in senior accommodation will be required.
All these market fundamentals represent an opportunity for real estate investors and operators, since Senior Living is still a growing market in Portugal with demand continuously outstripping supply and predominantly made up of Nursing Homes. This means that there is room to grow in scale with the addition of stock, but also with respect to different residential models with the entry of new professional players already well established in international markets.
Currently, Montepio, Orpea and PSHC by Core Capital are the major operators within this asset class in Portugal. In 2023, new residences are expected to open from Momentus Senior, Orpea, Clece Group, DomusVi, Círculo de Mestres and Cruz Vermelha Portuguesa, comprising a total of more than 600 additional beds.
Investment in Healthcare and Senior Living has significantly increased in the past recent years. In 2022 reached €82M due to the sale of three hospitals and one healthcare. Notwithstanding, investment in Senior Living with independent operation continues to be low as the market is still emerging. Therefore, investment in this sector results predominately from the expansion of a few operators, either through the purchase and renovation of existing units or the acquisition of land for new construction. In 2023, the investment in Healthcare achieved €6.4 million.
Gross prime yields stands at 6.25% in Q1 2025 in senior living developments and 6% in hospitals with a lease contract.