Sales Market

Sales Market

Updated in March 2023

After plummeting during the great financial crisis (GFC) and the Portugal’s economic crisis that followed, the residential market started revamping in 2014, with the renovation of numerous buildings, initially in Lisbon and Porto city centres. The introduction of legal and fiscal changes, such as the reform of the Urban Lease Law and a new Urban Renovation Regime (establishing the reduction of the VAT rate from 23% to 6%), attracted the interest of developers and investors. Simultaneously the Non-Habitual Residents Tax Regime and the Residence Permit for Investment Activity (“Golden Visa”), targeting the European and non-European markets respectively, triggered the rise of a new demand from foreign purchasers. We estimate that the number of houses bought by foreign purchasers has more than double within a decade. The French, the British and the Brazilians comprise the major buyers.

The revamping of the residential development market started with small scale renovation projects, but new greenfield larger schemes are now being built all over the country. Notwithstanding, and despite double digit growth rates over the past four years in the number of new houses completed, construction levels are still low and there is a high unmet demand. An annual average of 76,250 houses were completed in the first decade of the century contrasting with only 13,000 during the second decade.

New Houses in Portugal

Source: INE (Instituto Nacional de Estatística)

Official data from 2021 reveals a growth of 13% in the number of new houses completed and an even more significant increase in number of transactions (+20%), with more than 165,000 houses sold. Despite a slight slowdown on number of transactions in the last quarters of 2022, last year registered another record high – 167,900 houses sold, an increase of about 1,3% on number transactions.

However, we may see a slowdown in the pace of sales growth over the upcoming months. Not only has the Covid-19 pandemic slowed down licensing processes in several municipalities, impacting the availability of new homes for sale, but also the affordability of homes is more restricted due to higher interest rates and inflation, which is affecting household net incomes.

Houses sold in Portugal

Source: INE (Instituto Nacional de Estatística)

Housing sale prices maintain their growth trajectory

More certain is the maintenance of the upsurge in sales prices. The lack of labour, increase in the cost of energy and construction materials, supply chain disruptions, as well as a persistent delay in urban licensing procedures, will postpone construction works even further and sustain the continued rise in housing sale prices in Portugal. The Housing Price Index shows successive increases since 2014 and in 2022 the rise was around 13%. We predict a similar dynamic for 2023. However, since the beginning of 2022 we have already observed a slight slowdown of prices for new houses. In 2023, prices are likely to keep on this track and we might see price adjustments due to a weakening of the sales market driven by high interest rates environment. Nevertheless, shortage of supply will prevent severe falls.

House Price index

Source: INE (Instituto Nacional de Estatística)

Indeed, development is expanding to a growing number of councils (aside from Lisbon and Porto) and, as new product enters the market, we will see prices rise in those locations. Overall, we foresee an increase in the average price in most councils, except for Lisbon, where the supply of prime product is more consolidated and a greater number of projects targeting the medium-high segment are beginning to emerge.

The amendment of the Golden Visa program, in force from the beginning of 2022, excludes housing purchases in high population density zones. This will impact particularly urban renewal projects in Lisbon and Porto city centres, causing a reduction in the sales volume and a stabilization, or even decline, in prices.

Conversely, the new Golden Visa regime will stimulate an increase in opportunities to develop projects in specific low population density zones like Comporta, Douro and Alqueva, among others, and the regeneration of historic centres in the country’s inland regions.

Build-to-Rent sector will emerge through affordable housing meeting an increasing awareness regarding Social Sustainability.

The Build-to-Rent market is still incipient in Portugal. A very profitable Build-to-Sell market and the lack of conditions, namely in terms of legislation and taxation have been lagging the sector to flourish. However, in 2021 efforts were made to launch the affordable housing market. Municipalities as Lisbon and Porto have implemented different programs and the first tenders were launched.

Nevertheless, the major contribution to stimulate interest in this market comes from the publication, at the end of 2021, of a decree-law establishing the reduction of the VAT rate from 23% to 6% in the construction or redevelopment of affordable housing. Thus, we expect the first projects to be launched.

At the same time, sustainability is a topic that spans all asset classes. In housing, for many years the focus has been on energy certification. We are now seeing in Portugal an interest in environmental certification, namely in rental assets like student residences. However, the pandemic brought to light various social concerns, giving greater emphasis to the “S” in ESG. Therefore, we should observe a greater interest from real estate funds with sustainability criteria to invest in affordable housing projects.

Beyond the build-to-sell market there is a range of living concepts still to emerge and grow. Build to rent, co-living and affordable housing are in very early stages and will soon join the growth path that is currently being witnessed in student and senior accommodation.


The Lisbon Metropolitan Area (LMA) includes the city of Lisbon and the neighbouring councils, comprising a total of 18 councils, divided between the north and the south bank of River Tagus.

Lisbon Metropolitan Area


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%).

New Houses in Lisbon Metropolitan Area

Source: INE (Instituto Nacional de Estatística)

Units Sold in Lisbon Metropolitan Area

Source: INE (Instituto Nacional de Estatística)

In recent years, Lisbon Metropolitan Area has observed an increase of new houses but still far from the levels of completed dwellings registered before the great financial crisis (GFC). 

Between 2013 and 2019, the number of houses sold in LMA more than doubled, disclosing a new dynamic after the great financial crisis period. There was a stabilisation in 2019, followed by a 16% decrease in 2020 mainly caused by Covid-19 pandemic. Nevertheless, this context has not changed the demand for houses, as sales returned to pre-pandemic levels in 2021, exceeding 51,000 units.

In 2022, 50,218 houses were sold in Lisbon MA, representing a 2% decrease when compared to the previous year. Sales prices have been escalating in all LMA councils. Lisbon, Cascais and Oeiras record the most expensive houses while Alcochete and Palmela were the councils that observed the highest price upsurge over the last three years.

Despite pandemic crisis, prices continued to grow over 2020 and 2022. Lisbon Metropolitan Area registered a 10% y-o-y increase of median sales price in 2021. In 2022, prices continue on the rise with the first, second and third quarters of the year disclosing a c. 16%.

Lisbon City Residential Zones

Lisbon City Residential Zones


Lisbon city has 24 parishes. Lapa and Restelo are traditionally the wealthiest neighbourhoods in Lisbon city, with an image of great prestige and “social status”. Chiado, Príncipe Real and Avenida da Liberdade gained importance with their landscape views and glamorous buildings, and are highly sought after by foreign buyers, becoming the most expensive areas in the city.

In the 2021 Census, Lisbon city recorded a total of 320 thousand homes. Similarly, to what was observed in the country in general, Lisbon city development activity was weak over the last decade which results in a home stock decrease of 2% between 2011 and 2021.

The number of new houses concluded per year in Lisbon decreased, from an historical maximum of 2,900 in 2003 to only around 47 units in 2016. The recovery of the residential construction sector initiated in 2014 however, was mainly focused on renovation and refurbishment projects - usually small scale - in the city centre. Nevertheless, new houses in Lisbon have been increasing since 2019 and registered a boost in 2021, when the number of completed dwellings in new construction more than doubled to 502 homes.

Effectively, development is being targeted at the acquisition of land plots outside of the historic city centre for greenfield projects and large size projects were already completed.

On the demand side, Lisbon recorded an increase in the sale of homes early in the century. The number of transactions reduced from a maximum of 15,700 in 2006 to less than 6,000 in 2012. An upsurge in the volume of sales was observed since the end of 2013. After a 5-year growth, the number of houses sold in Lisbon fell in 2018, 2019, and 2020, clearly mirroring the lack of supply. However, 2021 disclosed a strong recovery of the sales market in Lisbon with a 17% increase. In 2021, more than 11,000 houses were sold in the city, representing a 6% growth compared to the homologous period. According to Confidencial Imobiliário, more than 11,000 houses were sold in the city in 2022.

Effectively, there is a general scarcity of supply targeting the national demand due to unaffordable prices, house size and locations, driving demand to the outskirts of the city and nearby councils.

It is therefore not surprising that prices have more than doubled over the past six years. Despite the pandemic, median sales price in the city for new houses increased 11% in the last three years achieving 4,715€/sqm in 2021. In 2022, median sales prices for new houses continue on the rise with a 16%, 20% and 13% in the first, second and third quarters of the year, respectively. In the third quarter of 2022, the median sales price of new transactions in the past 12 months stood at € 5,220/sqm.

The most expensive zones in Lisbon are Avenida da Liberdade, Príncipe Real and Chiado with amazing river views, recording average prices exceeding €10,000/sqm for new houses in Misericórdia, and exceeding € 7,000/sqm in Avenidas Novas and Santo António parishes.



Porto Metropolitan Area (PMA) includes the city of Porto and the neighbouring councils, comprising a total of 17 councils, divided between the north and the south bank of Douro River.

Porto Metropolitan Area


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%).

New Houses in Porto Metropolitan Area

Source: INE (Instituto Nacional de Estatística)

In recent years, Porto Metropolitan Area has observed an increase of new houses but still far from the levels of completed dwellings registered before the great financial crisis. In the last decade (2011-2021), Porto and Gaia also registered the highest construction volume – each representing 17% of total new homes - followed by Santa Maria da Feira (9%) and Matosinhos (8%).

Houses Sold in Porto Metropolitan Area

Source: INE (Instituto Nacional de Estatística)



















Between 2013 and 2019, the number of houses sold in PMA more than doubled, disclosing a new dynamic after the great financial crisis period. At this point, there was a stabilisation, followed by a 11% decrease in 2020 mainly caused by Covid-19. Nevertheless, this context has not changed the demand for houses to buy as figures from 2021 already exceed pre-pandemic levels, recording approximately 27,000 houses sold. This level of demand continued in 2022 with a total of 25.242 houses sold in Porto Metropolitan Area.

Sales prices have been escalating in all Porto MA councils. Porto and Matosinhos record the most expensive houses while Gondomar and Valongo were the councils that observed the highest price growths over the last three years. However, Espinho and Trofa account for the highest increases when bearing new houses median sales value for the same period.

Despite pandemic crisis, prices continued to grow over 2020 and 2021. Porto Metropolitan Area registered median sales price increases y-o-y, of 10% in 2021. The median sales price in Porto MA stood at €1,557/sqm in the third quarter of 2022, representing a 17% y-o-y increase. Median sales for new houses stood at €2,085/sqm.


Porto City Residencial Market

Porto city has 7 parishes. The parish of Aldoar, Foz and Nevogilde, comprises the wealthiest neighbourhoods in Porto along the sea front, while recent developments have been targeted at the Historic Centre and Riverfront Area.

Porto City Residential Zones


Porto recorded a strong level of construction growth in the beginning of the century. However, according to the last Census, there were 133 thousand homes in Porto in 2021 reflecting a decrease of 3% in the last decade. New completions plummeted between 2011 and 2016, although a new dynamic has been observed since 2018 with new supply in 2020 and 2021 almost triplicating the previous years values (approximately 900 unit in 2021, but still far from levels of new houses of the beginning of the century that surpassed 1,000 houses per year.

Similar to Lisbon, in 2017 we began to witness the sale of large plots for development in other councils of Metropolitan Area which combined with the lack of new developments until 2018 may explain this downward trend.

New Houses in Porto City

Source: INE (Instituto Nacional de Estatística)

Regarding sales, there was a fall from 7,000 homes in 2000 to 3,000 in 2012. Increase initiated in 2013 with high growths recorded since 2015, achieving 6,800 units sold in 2018, but a decrease was observed in 2020. Notwithstanding, and, similarly to Lisbon, a significant percentage of these sales are not intended for permanent housing, reflecting a high imbalance between supply and demand.

Housing prices have seen a considerable increase (23%) between 2019 and 2021, achieving a median sales value of €2,467/sqm in the third quarter of 2022. Median sales price for new houses has also been registering an upward trend to €2,937/sqm in the third quarter of 2022.

Foz is the most expensive neighbourhood recording a median sales price of above €3,8950/sqm and €5,235/sqm for new houses. However, the highest value growth has been observed in the Campanhã parish.

Rental Market

Updated in March 2023

The Private Rented Sector in Portugal is still immature. In the first part of this century the size of the rental sector was in decline. This was the result of a strong stimulus towards home ownership, provided by tax incentives, low interest rates and high loan-to-value ratios. This was coupled with a long period of strict rent controls. Nevertheless, profound changes in the lease law in 2012 and a strong growth in house prices, has reversed this trend. By 2019, PRS had grown to 26% of households, up from 20% in 2011. We expect this trend to be maintained as several macro trends such as growing flexibility and mobility, age of marriage and first childbirth, scarcity of affordable housing, amongst other, are impacting the way that people live.

As a way to cope with increasing inflation, Portuguese Government announced a cap of 2% in rental update for 2023 both in residential and commercial contracts. The difference to what should be the rental increase (5.45%, based in the 12-month inflation up to August) will be reflected as an additional benefit in the annual income statements.

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.



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 20% increase in 2021. In 2022, were recorded over 9,900 new rental contracts in the city.

The scarcity of supply has pushed up rents in all the Lisbon Metropolitan Area councils. The overall median rent in LMA increased 47% in the last five years, achieving €8.9/sqm/month in 2021 and €9.89/sqm/month in 2022. The city of Lisbon has the most expensive rents (€12.96/sqm/month), followed by Cascais (€12.8/sq m/month) and Oeiras with (€11.45/sq m/month) in 2022.

The prospects for MFH are huge as the development rental property has been very low over the past decades. The first large-size projects inaugurated in 2020, in Carcavelos and Lisbon councils, by Smart Studios, are offering a co-living experience. In addition, several affordable rental schemes are expected to be launched.



Similar to Lisbon, there has been large amount of urban regeneration over the past years in Porto, with the renovation of several buildings. However, developers have favored the sales market or tourism accommodation resulting in rental schemes and consequently, pushing up prices.

The median rent value in Porto Metropolitan Area has increased by 47% between 2017 and 2021 to €6.51/sqm/month. This trend has been observed across all councils.

In Porto city, in particular, there was a slight decrease in 2020 caused by a halt in tourism and many short-term rental units being transferred to the private rental however, median rent raised again to €8.85/sqm/month in 2021 and €10/sqm/month in 2022.

Porto has a strong potential for the development of the MFH sector, and growth is likely to be faster than in Lisbon as land sites are cheaper and there are municipal programs such as Porto com Sentido being put in place to promote 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

Source: CBRE


In the Algarve, the so-called Golden Triangle area is home to some of Europe’s most well-known developments: Quinta do Lago, Vale do Lobo, and Vilamoura, the last two still having great potential for expansion.

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.

High dependence on the foreign market was reflected in the highest regional fall in housing sales in 2020, with a decrease of 19% in Algarve. In 2022, the number of house solds (more than 15,000) was 8% higher than in 2019.

Lisbon North Coast

Although not yet as consolidated as the Algarve, the Lisbon North Coast is positioning itself as a real estate destination near Lisbon with a number of golf courses anchoring the projects in this region. There are already a few resort developments on the market, namely: Praia d’El Rey, Campo Real, Bom Sucesso, Royal Óbidos and West Cliffs (by Praia d’El Rey). With exception of Bom Sucesso and West Cliffs, all the other resorts include 5-star hotels, some of which are managed by international chains such as Marriot and Dolce. It should be noted that there is a significant percentage of families living all year round in Lisbon Northern Coast resorts, namely in Praia d’El Rey and Campo Real.

Lisbon South Coast

The Lisbon South Coast (internationally known for one of its villages named “Comporta”) is located south of Sado River less than an hour’s drive from Lisbon and is almost fully integrated in the Alentejo region. The area features dune-protected and white sandy beaches that span over an astonishing 60km from Troia to Sines. Protected under the Natura 2000 Program, the region is one of the last strips of unspoilt coastline in Europe and certainly one of the continent’s high-end tourism destinations with highest potential for development.

The zone has seven major tourism resorts, namely Troia Resort, Pestana Troia Eco-Resort & Residences, Herdade da Comporta, Pinheirinho Golf & Beach Resort, Muda Reserve, Club Med and Costa Terra. In addition, there are several other smaller high-quality projects including Sublime, Melides Art, Comporta Retreat, amongst others, which clearly elevate the standard of this destination. These projects are in different phases of development and those that are already under marketing reach values between €4,500 and €7,500/sq m. Future pipeline includes a further 4,000 residential units located throughout the region; some of which will be positioned at a price well above the current values, similar to the upper boundary of price per sq m of new homes in the Algarve.

The Covid-19 pandemic boosted the domestic second home market and the Lisbon South Coast was one of the most sought after locations.

Student Housing Market

Student Housing

Updated in March 2023

In an increasingly globalised world, studying abroad is becoming more common place. Portugal, with several universities recognised in the top 500 international rankings, lower tuition and accommodation costs, and a high quality of life, is well-positioned to attract international students.

Over the last few years, the number of international students has been growing, mitigating a stabilisation in domestic students. The inflow of international students doubled between 2014 and 2019 displaying an average annual growth of 16%. This growth resulted in 60,679 international students registered in Portuguese universities in 2019 - accounting for 15% of total university students.

In 2020, there was a downfall of 9% on international students due to the pandemic crisis, mainly driven by the reduction of students enrolled in credit regimes such as Erasmus (-51% y-o-y) which normally stay for a semester. In fact, despite the general decrease of international students, the number of students enrolled in degree regimes continued to grow in the academic year 2020/2021 (+7% y-o-y). In 2021/2022 we already notice a strong recovery of international students, not only those enrolled in degree regime but also the Erasmus students, accounting to a 15% increase in the first semester of the academic year.

International students

Source: DGEEC (Direção-Geral de Estatísticas da Educação e Ciência)

Lisbon Region accommodates the highest number of international university students, with a share of 38%, followed by Porto, with 19% and Coimbra with 8%.

The upsurge of international students has resulted in an increase in the number and quality of student accommodation supply, formerly comprised of private rented apartments and accommodation provided by universities and religious institutions.

Specialist purpose-built student accommodation (PBSA) in Portugal is a growing market, with demand still outstripping supply. The first specialist purpose-built student residence, operated by an international brand, opened in Lisbon early in 2018 and the number of beds in PBSA has more than tripled since then. Several foreign operators have entered the market (such as Xior, Milestone, Valeo, Odalys, Livensa Living, amongst others) and others are looking for opportunities. At the end of 2022, there was a total of 38 PBSA schemes totalling about 23,600 beds and an additional c. 3000 should be available at the end of 2023. Most schemes can be found in Lisbon and Porto.

PBSA stock addition

Source: CBRE Research

Prices in the existing Specialist PBSA are on average €750/month for an individual studio (with a bathroom and kitchenette) in Lisbon and €600/month in Porto.

Investment in PBSA has started with the construction of new development and forward purchase transactions. A few portfolios of a mix of existing and planned schemes were already transacted including the Portuguese portfolios of U.Hub by Xior and recently Smart Studios by Round Hill Capital, this one including a blend of student accommodation and co-living. Net prime yields were 5.5% in March 2023 with a management contract.

Senior Living

Updated in March 2023

The increasing longevity, growing share of elderly population living alone, and the new generation requirements trigger the need for several social and cultural changes focusing on pensions, policies, social services, health, and long-term care. This includes new residential models capable of meeting the new aspirations of these generations when entering old age.

Population aging is a reality and a problem that is evident throughout Europe, but in Portugal it assumes a greater relevance. Projections indicate that by 2050 the country will have the largest elderly proportion (35%) in Europe, and a dependency ratio that reveals that there will be one and a half persons at working age for each elderly person.

Population aged 65 and above

Source: INE (Instituto Nacional de Estatística)

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.

Gross prime yields were 5.25% in March 2023, both in hospitals and senior living developments with a lease contract.