Housing prices stabilize in May

In May 2025, the Portuguese real estate market showed signs of stabilization in housing prices, as reported by Vida Imobiliária. After months of steep increases, with double-digit annual variations, the residential segment showed a more balanced trend, with marginal fluctuations and occasional reductions in some areas.

This stabilization is related to several factors:

• Stabilized Euribor, which reduced pressure on financing costs;

• Market congestion, resulting from a lack of new supply and delayed renovation of existing stock;

• Bank of Portugal actions and fiscal measures, which aim to moderate banking costs and prevent localized bubbles.

Despite this trend, the average purchase price remains high: in urban areas, it exceeds €400,000, while for rentals, the average is around €1,300 per month in Lisbon. Continued high construction costs, especially for new housing, contribute to the market's lack of stability.

The evolution has, however, brought positive consequences:

• Greater predictability for private investors, enabling better risk management and asset planning;

• Opportunities for developers to structure medium- and long-term projects with more calculable margins;

Relieved pressure on end-users, who have more time to research, compare, and decide.

However, these stable conditions are expected to be temporary. They largely result from demand pressure that has not abated but has been held back by structural supply constraints—lack of new inventory, slow public works, and high raw material costs.

It is expected that, by the end of 2025, tax adjustments and simplified licensing procedures may be necessary to support rehabilitation, as well as accelerated timelines in priority neighborhoods.

Learn more here!

Source: VidaImobiliária

Hashtags: #StablePrices #HousingPortugal #RealEstateMarket #Financing #Euribor