Housing prices and sales values in Portugal reached new historic highs between April and June 2025. In the second quarter, the real estate market recorded a 17.2% increase in house prices compared to the same period of the previous year. This accelerated growth reflects both the scarcity of supply and the persistence of strong demand, with the number of transactions rising by 15.5% compared to the second quarter of 2024.

Evolution of housing prices

The housing price index has been recording successive increases since 2013, now reaching the highest value ever documented by the National Statistics Institute (INE). Compared to the previous quarter, the variation was 4.7%, consolidating the trend of residential property appreciation. Existing homes experienced the sharpest rise, up 18.3%, while new home prices grew by 14.5%. These figures show a strongly dynamic market, with the most pronounced appreciation in second-hand housing.

The average annual rate of change in housing prices also set a record, standing at 13.8%. This result confirms a generalized environment of appreciation, with greater pressure in the most sought-after urban centers, such as Lisbon, Porto, and the Algarve, but also reaching unprecedented levels in regions such as Madeira and Alentejo.

Housing sales volume

The Portuguese real estate market experienced remarkable activity in the second quarter of 2025, with a record volume of properties sold and a significant increase in the total value transacted. The main figures from this period illustrate the sector’s growing dynamism:

  • Around 42,889 homes were transacted, a 15.5% increase compared to the second quarter of 2024.

  • The total value of sales exceeded €10.3 billion, setting a new quarterly record.

  • The majority of properties sold were existing homes, accounting for over 80% of the total.

  • New homes also recorded growth, with 8,310 units sold, up 10.9% from the previous year.

  • The strong sales momentum was driven mainly by domestic demand, which increased 17.7% in the number of transactions.

  • Foreign buyers represented a smaller share, with 2,107 properties purchased, a decline of 14.5%.

Buyer profile and demand dynamics

The vast majority of sales were carried out by buyers with tax residency in Portugal, responsible for about 40,000 transactions, the highest level in the last four years and an annual increase of 17.7%. This pace highlights the strengthening of domestic demand, underscoring the role of Portuguese families in the sector’s performance. Only 2,107 homes were purchased by buyers with foreign tax residency, representing a 14.5% drop in this market segment.

Domestic demand benefits from government support measures, such as IMT tax exemptions for young buyers and the reinforcement of public guarantees, combined with stable interest rates that facilitate the acquisition of a first home. The entry of family groups into the market, after years of restraint, is rebalancing the sector’s dynamics and concentrating most real estate investment in resident buyers.

Regional impacts and available supply

Lisbon leads the market with average prices above €381,000 per property, followed by the Algarve and Madeira, whose average values are also approaching €300,000. In Alentejo, prices rose 12%, reaching an average of €123,000, remaining the most affordable option.

The supply of homes for sale continues to decline: 26% less since the 2020 peak. The shortage of available properties is one of the main drivers of rising prices, further aggravating the difficulties families face in accessing decent housing and stimulating demand in suburban and inland areas.

Outlook for market evolution

The Portuguese real estate sector remains on an appreciation trajectory, fueled by the combination of limited supply, robust domestic demand, and state support for homeownership. It is estimated that, as long as imbalances between supply and demand persist, housing prices and sales values will continue to rise, with direct impacts on family budgets and on the market’s attractiveness for both domestic and foreign investors.

However, to ensure stability and accessibility, it is crucial to accelerate the pace of new housing construction and rehabilitate the existing building stock. Public and private strategies need to align to correct distortio