Portuguese Real Estate Market Attracts €1.5 Billion in Foreign Investment
- Redação Mudei e Agora
- Aug 11
- 2 min read
Portugal continues to be one of Europe’s preferred destinations for foreign capital. In the first half of 2025, the country attracted €1.5 billion in international investment, according to consultancy Savills. This figure represents a 12% increase compared to the same period in 2024, confirming Portugal’s appeal even amid global economic uncertainty.
Leading cities in capital attraction
Lisbon and Porto remain leaders, concentrating over 70% of the invested amount. In the capital, high-end residential projects, modern offices, and luxury tourism developments stand out. Porto has increasingly attracted investors in technology, coworking spaces, and charming tourism projects.
Origin of capital
The report highlights main investor origins as:
United States
United Kingdom
Germany
France
United Arab Emirates
The growing presence of Middle Eastern funds is a key highlight in 2025, reflecting the search for portfolio diversification and stable long-term investments.
Most sought-after segments
Premium residential — driven by foreign buyers seeking second homes, especially in Lisbon, Cascais, and the Algarve.
Hospitality — boosted by tourism growth and national strategy to attract high-spending visitors.
Next-generation offices — adapted to hybrid work, with environmental certifications and high energy efficiency.
Logistics assets — supported by e-commerce growth and Portugal’s strategic position in European distribution.
Why Portugal is so attractive
Several factors explain Portugal’s strength as an investment destination:
Political stability and safety;
Mild climate and quality of life;
Competitive tax regime for non-habitual residents;
Prices still lower than other mature European markets;
Strong international connectivity.
Risks and challenges
Despite the positive outlook, concerns include:
Scarcity of supply in premium locations;
Rising construction costs (see Matter 3);
Potential regulatory pressure on short-term rentals;
Risk of saturation in luxury hospitality.
Outlook for H2 2025
Experts expect foreign investment could reach €3 billion by year-end, provided macroeconomic conditions remain stable and a solid project pipeline is maintained.
Greater focus on sustainable projects and long-term rental housing is seen as a way to maintain international interest while addressing local housing needs.
Conclusion
Portugal has once again consolidated as a safe and competitive market for foreign investors. The combination of stability, profitability, and quality of life creates a unique environment, but balancing capital appetite with policies that guarantee housing access for residents remains crucial.
Source: Savills / Público / Idealista News
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