Prices, rents and demand: a recent snapshot of the Portuguese housing market.
- Redação Mudei e Agora
- 3 days ago
- 3 min read
The Portuguese housing market is experiencing a period of adjustment after several years of strong appreciation. Recent data shows that sale and rental prices continue to rise, but at a less aggressive pace than in the recent past, especially in some district capitals outside the major urban centers. In 2023 and early 2024, there was an increase in the average time properties were on the market, a sign that buyers and sellers are testing new price equilibrium.
At the same time, the supply of houses for sale registered an increase of around 11% in just one year, which helps explain the slowdown in the rate of price increases. In the first quarter of 2024, houses became, on average, 1.9% more expensive compared to the previous quarter, a more moderate value when compared to earlier phases of the cycle. Lisbon, however, continues to stand out for its price pressure: the capital registered an increase of around 5% in a given period, with average sales values around €450,000.
This reality reinforces the idea of a multi-speed market. In large metropolitan areas, especially Lisbon and Porto, the combination of strong demand, scarcity of urban land, and higher disposable income keeps prices at high levels. In medium-sized cities and peripheral areas, growth is more moderate, opening up investment opportunities with a better quality/price ratio, especially for buyers seeking their first home.
In the rental market, the pressure remains intense. Demand for rental properties continues to far exceed supply in virtually all major urban centers and tourist destinations. Despite this, a slowdown in the rate of rent increases was observed at the end of 2025, with variations around 0.9% in certain periods, which may reflect a limit in families' ability to withstand successive increases.
Accessibility remains one of the main challenges. In many cities, the relationship between average wages and rent or mortgage payments is at the limit of what is sustainable, especially for young people and families starting out. This context fuels the demand for alternatives such as shared housing, areas further from city centers, or even moving to another municipality, which has a direct impact on how new housing projects are planned.
On the supply side, urban rehabilitation continues to be an essential piece of the puzzle. In aging central areas, rehabilitation allows for the creation of products with privileged locations and greater energy efficiency, albeit at high costs. The challenge is to make these operations financially viable without excluding middle market segments, which requires creativity in project structuring, incentives, and, in many cases, public-private partnerships.
For investors, the current scenario is one of greater selectivity. With the rise in interest rates in recent years, the margin between rental income and financing costs has narrowed, forcing a more refined analysis of locations, typologies, and tenant profiles. Well-located assets with good energy efficiency and the capacity to attract stable demand continue to be the most resilient, while properties in saturated or uncompetitive areas face a greater risk of vacancy and the need for repositioning.
For real estate professionals, this recent "snapshot" leaves some clear clues: granular information about micro-markets is worth more than national averages; understanding the real impact of interest rates and household incomes is fundamental in negotiation; and the ability to guide clients towards sustainable decisions, rather than speculative moves, will be increasingly valued. In a more mature and competitive market, knowledge and specialization have become the main differentiators.
Sources: Pearls of Portugal – “The Portuguese real estate market in 2024”; idealista/news – “Pass by here – 20/01/2026”.
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