Find Your Place in the Sun: Why Setúbal is the New Hotspot for Lisbon Property Buyers

Strategic market analysis of the significant shift in mortgage demand from central Lisbon to the high-growth Setúbal district.

For years, the narrative of Portugal's property market has been dominated by Lisbon. But a fundamental shift is underway. New data reveals a significant migration of homebuyer demand away from the capital's high-priced core and towards its peripheral regions, with one area emerging as the clear frontrunner: the Setúbal district. According to a November 2025 report from financial analytics firm ComparaJá, while Lisbon's share of mortgage simulations fell by nearly 3 percentage points, Setúbal's surged from 13.5% to 15.2% in a single month. This isn't a statistical blip; it's the clearest signal yet of a structural change in the market, creating a compelling opportunity for savvy investors and homebuyers to discover properties in Setúbal.

This decentralization is driven by a powerful and logical force: the search for value and quality of life. As prices in central Lisbon continue to test affordability limits, buyers are increasingly looking to the well-connected municipalities of the 'Margem Sul' (South Bank). As Pedro Castro, Head of Operations at ComparaJá, noted, “Lisbon continues to be the market's thermometer, but price pressure is pushing families to peripheral areas.” He adds that “Setúbal and the south bank are taking on an increasingly relevant role, especially among young buyers looking for more accessible conditions and a better quality of life.” This article dives deep into the data, explores the drivers behind this trend, and analyzes what it means for your next property investment.

The Data-Driven Case for Setúbal's Rise

The numbers from the ComparaJá report are unequivocal. While Lisbon (35.8%) and Porto (16.6%) still command the largest shares of mortgage demand, both saw their dominance erode in November. Setúbal was the only district to post a significant gain, solidifying its position as the third most sought-after region in the country for property financing. This trend is not new but an acceleration of a movement observed throughout 2025. Other districts like Braga (+1.7 p.p. year-on-year) and Santarém (+1.1 p.p.) also show growth, confirming a broader pattern of decentralization. For investors, this data provides a roadmap to the next wave of property market growth, a key theme in our Market Intelligence & Analysis blog.

Key Market Shifts (October vs. November 2025):

• Lisbon: Mortgage demand share fell from 38.7% to 35.8% (-2.9 p.p.).

• Setúbal: Demand share surged from 13.5% to 15.2% (+1.7 p.p.).

• Porto: Demand share decreased, falling to 16.6%.

• The Algarve: Maintained a smaller share (under 5%), reflecting its focus on second homes and tourism rather than primary residences.

This data is critical because mortgage applications are a leading indicator of property transactions. They represent serious, financially qualified buyers actively looking to purchase. The sharp increase in Setúbal's share indicates a powerful and immediate shift in buyer intent. It suggests that the district is no longer just an 'alternative' to Lisbon but a primary destination in its own right. Before making a move, it's wise to consult with accountants in Setúbal to understand the full financial picture.

Why Setúbal? The Irresistible Combination of Value and Lifestyle

The migration of demand to Setúbal is rooted in a compelling value proposition that resonates deeply with modern buyers, from young families to international remote workers. The district offers a unique blend of affordability, connectivity, and an enviable lifestyle that central Lisbon can no longer match for the same price point.

1. Affordability and Space

The most significant driver is the price differential. The cost per square meter in municipalities like Almada, Seixal, and Setúbal city can be 30-50% lower than in prime Lisbon neighborhoods. This allows buyers to acquire larger properties, often with gardens, terraces, or sea views, for the price of a small apartment in the capital. For families needing more space or professionals seeking a dedicated home office, this is a game-changing advantage. Our True Cost Calculator can help you compare the overall expenses.

2. Unbeatable Quality of Life

Setúbal is not just about lower prices; it's about a higher quality of life. The district is home to the stunning Arrábida Natural Park, the pristine beaches of the Tróia Peninsula, and the vibrant surf culture of Costa da Caparica. This proximity to nature offers a lifestyle centered on well-being and outdoor activities, a powerful draw in the post-pandemic era. This is a key consideration for international clients seeking a better life balance.

3. Improving Infrastructure and Connectivity

The perception of the South Bank as 'distant' is rapidly becoming outdated. Significant investments in infrastructure have made the commute to Lisbon faster and more efficient. The Fertagus train line connects Setúbal to Lisbon's Entrecampos station in under an hour, while a network of ferries and highways provides multiple options for commuters. This improved connectivity is unlocking the region's potential, making it a viable base for those who work in Lisbon but choose to live elsewhere. Reviewing the Setúbal PDM can offer insights into future infrastructure projects.

Investment Implications: Capitalizing on the Great Migration

For real estate investors, this demographic and capital shift represents a clear and actionable opportunity. The surge in mortgage demand is a precursor to rising property values. Early investors who invest in Setúbal real estate now are positioning themselves to benefit from the wave of demand that is just beginning to crest.

Investor Insight: The growth in Setúbal is not speculative. It is underpinned by a genuine demographic shift driven by fundamental needs for affordability and quality of life. This makes it a more stable and predictable growth market compared to purely tourism-driven hotspots.

The rental market is set to follow suit. As more people move to the area for primary residence, the demand for long-term rentals will increase, creating attractive opportunities for buy-to-let investors. Properties near transport hubs, schools, and local amenities will be particularly sought after. Calculating the potential income with a Rental Yield Calculator is a crucial step in evaluating these opportunities. Furthermore, the region's appeal to digital nomads and remote workers creates a strong market for high-quality, furnished rentals.

The development pipeline is also responding. We are seeing a rise in high-quality new builds and off-plan projects in Setúbal, designed to meet the expectations of buyers moving from the prime Lisbon market. Investing in these new developments, with the guidance of experienced constructors in Setúbal and architects, can be a strategic way to enter the market.

A New Housing Map for the Lisbon Region

The ComparaJá report confirms that the housing map of the Lisbon Metropolitan Area is being redrawn. Lisbon is no longer the only game in town. The pressure cooker of the capital's property market is creating new, vibrant, and opportunity-rich markets on its periphery. Setúbal is leading this charge, transforming from a collection of commuter towns into a desirable destination in its own right.

This evolution presents a more complex but ultimately more rewarding market for discerning buyers and investors. It requires a deeper understanding of local dynamics, infrastructure projects, and neighborhood characteristics. The one-size-fits-all approach of focusing only on prime Lisbon is no longer sufficient. The greatest opportunities now lie in understanding and acting on this great migration. To navigate this new landscape and secure your stake in Portugal's most dynamic growth market, it is essential to partner with local experts. Our team of English-speaking real estate agents has the on-the-ground knowledge to guide you through every step of the process, from identifying the right opportunity to securing it with the help of trusted notaries in Setúbal.

Frequently Asked Questions about the Setúbal Property Market

Why is Setúbal gaining popularity for property buyers?

Setúbal is gaining popularity due to its more affordable property prices compared to central Lisbon, combined with excellent transport links to the capital and a higher quality of life. Buyers are finding larger homes with more space for their money, close to the beaches of Costa da Caparica and the nature of Arrábida Natural Park. This makes it an attractive alternative for families and young professionals.

Is property in Setúbal a good investment?

Yes, property in Setúbal currently represents a strong investment opportunity. The significant increase in mortgage demand, rising from 13.5% to 15.2% in just one month, signals a market with high growth potential. As Lisbon's price pressure continues, demand is expected to keep flowing into Setúbal, driving capital appreciation. Our investment analyzer can help model potential returns.

How does Setúbal compare to Lisbon in terms of property prices?

Property prices in Setúbal are significantly more competitive than in central Lisbon. While prices vary by neighborhood, buyers can generally expect to find larger properties, often with outdoor space, for a fraction of the cost of a smaller apartment in prime Lisbon areas. This price differential is the primary driver of the current market shift.

What are the main advantages of living on the South Bank (Margem Sul)?

The main advantages include a more relaxed lifestyle, proximity to stunning beaches and nature reserves, larger and more affordable housing options, and strong community atmospheres. With improving infrastructure, the commute to Lisbon is increasingly viable, offering the best of both worlds. For more on this, see our guide on location issues.

Which areas in the Setúbal district are most popular?

Areas like Almada, Seixal, and Setúbal city are very popular due to their transport links and urban amenities. Aroeira is known for its golf courses and proximity to the beach, attracting a premium market. Each municipality offers a different lifestyle, so working with local agents in Setúbal is key to finding the right fit.

Is the shift in demand away from Lisbon a long-term trend?

All indicators suggest this is a structural, long-term trend. The combination of high prices in Lisbon, the rise of flexible work, and a growing desire for more space and a better quality of life are fundamental drivers. As infrastructure in peripheral areas improves, this decentralization is expected to continue, as noted in our market analysis blog.

How can I finance a property purchase in Setúbal?

Financing a property in Setúbal follows the same process as in Lisbon. Both local and international buyers can apply for mortgages from Portuguese banks. It's important to understand your eligibility and the associated costs. Our Portuguese mortgage calculator is a great tool to start your financial planning.

What legal steps are involved in buying property in Setúbal?

The legal process is the same across Portugal. It involves due diligence, signing a promissory contract (CPCV), and completing the final deed (Escritura). Given the nuances of property law, it is highly advisable to work with an experienced real estate lawyer in Setúbal to ensure a secure transaction.