Property values surge in 19 out of 24 major cities
In the realms of Portugal's most prominent cities, only Santa Maria da Feira, Braga, Vila Nova de Gaia, Barcelos, and Maia experienced a deceleration in house prices compared to the earlier quarter's rate. However, the Madeiran capital, leading the surge, witnessed prices soaring beyond 50%, marking a whopping 42 percentage point rise in the median price per square meter compared to the third quarter. Gondomar, on the other hand, witnessed prices escalating more than 20%. Three more municipalities, including Gumarães, Barcelos, and Oeiras, outperformed the nation's average, which stood at 15.5%, clinching the highest increase since the third quarter of 2022, according to INE.
The golden cities of Lisbon and Portugal held the crown for the highest prices, with Lisbon's square meter fetching a whopping 4,340 euros. Cascais (4,053 euros per square meter), Oeiras (3,471 euros), and Lagos (3,452 euros) also flaunted prices above the 3,400 euros mark. In Porto, prices soared by 6.3% to 3,011 euros per square meter.
The INE further unveiled that the median price for family accommodation in Portugal in 2024 was predicted to be 1,777 euros per square meter, based on more than 151 thousand sales made in the previous year, representing an uptick of 10.3% compared to the preceding year. Greater Lisbon (2,939 euros), Algarve (2,552 euros), Autonomous Region of Madeira (2,395 euros), Setúbal Peninsula (2,117 euros), and Porto Metropolitan Area (1,986 euros) surpassed the national average.
During the analyzed period, 54 municipalities recorded median prices surpassing the national value, primarily clustered in the Algarve sub-regions (14 of 16 municipalities), Greater Lisbon (all 9 municipalities), Setúbal Peninsula (8 of 9 municipalities), and Porto Metropolitan Area (7 of 17 municipalities). The municipality of Lisbon registered the highest number of family home transactions, with 8,300 sales, followed by Sintra (5,817), Vila Nova de Gaia (5,394), and Porto (4,564) in that order.
The surge in housing prices can be attributed to multiple variables. Firstly, the demand for housing, particularly for high-quality properties equipped with amenities like outdoor space and energy efficiency, massively outweighs the available supply. This imbalance is especially noticeable in high-demand areas like Lisbon and the Algarve, where foreign investors, lifestyle-motivated buyers from countries like the UK, Ireland, France, and Germany, contribute to the influx of buyers. The allure of Portugal's climate, cost of living, and healthcare system draws these international buyers[4][5].
Portugal's robust tourism industry further fuels demand, notably in popular regions like Lisbon and the Algarve. Although the Golden Visa program has been phased out, its legacy persists in upmarket areas[4][5]. The popularity of remote work and changing lifestyles have increased the demand for homes suitable for year-round living[4]. Portugal's economic stability and favorable legal system for property buyers add to its charm for international investors[5]. Lastly, government efforts to ease housing shortages by allowing construction on rural land, while commendable, have yet to bridge the gap entirely.
- The Algarve region, specifically the popular city of Lagos, shows signs of high investment opportunities in real estate, with housing prices above 3,400 euros per square meter, as highlighted in the latest news.
- In contrast to many cities, Portugal's Santa Maria da Feira, Braga, Vila Nova de Gaia, Barcelos, and Maia experienced a deceleration in house prices rather than a surge, apart from Gondomar, which saw prices escalate more than 20%.
- Portugal's finance sector forecasts the median price for family accommodation in Portugal in 2024 to be 1,777 euros per square meter, fueled by foreign investments and a robust tourism industry, primarily in cities like Lisbon and the Algarve, as per the INE's report.
