According to a recent report by Engel & Völkers (Market Report Portugal 2025&2026), Portugal's premium real estate market ended last year with strong growth, despite global instability. Foreign capital has again become the key driver. In the second quarter of 2025, the number of transactions increased by 15.5%, and the total turnover of transactions exceeded 8.9 billion euros, with an annual increase in housing prices of 17.7%.
The main problem of the market remains the acute imbalance between supply and demand. Every year, the need for new housing exceeds the commissioning of facilities by about 14,000 units, which creates a structural deficit. Although the issuance of licenses for new projects increased by 10% at the beginning of 2025, the shortage of workers and the long construction time do not allow closing this gap, especially in popular coastal areas and large cities.
The gap in the cost per square meter between different regions continues to grow. The most affordable prices remain in the continental part (for example, Braga - about 1,704 euros per square meter), but in the prestigious locations of the Algarve and around Lisbon, the situation is radically different. For example:
- Cascais and Estoril average 5,591 euros per square meter
- Vilamoura is about 7,864 euros per sq. m.
- Vale do Lobo is approximately 9,252 euros per sq. m.
- Quinta do Laguna - about 13 256 euros per square meter
According to Daniela Rebouta, Sales Director at Engel & Völkers in Lisbon, the market is showing amazing adaptability. Portugal is perceived as a safe, stable and attractive jurisdiction, which supports the demand for both purchase and rental. At the same time, Margarita Oltra, regional manager of E&V Portugal, notes that buyers are becoming more discerning: now, in addition to location, they pay attention to the quality of building materials, environmental friendliness and long-term capital growth potential.
Against this background, the rental segment is under increasing pressure, especially in the metropolitan area. Due to the high purchase prices and the influx of the population, many are forced to rent housing, which further accelerates the rates.
The forecast for 2026 remains positive: the economy is expected to grow by 2.6%, which should facilitate access to mortgages and attract new foreign investors to resort areas and urbanized centers.
Source: Idealista
