Portuguese Property Prices Climb 7.6% Annually Amid Supply Constraints
The Portuguese housing market continues to experience significant price appreciation, with the latest data from September showing a 7.6% year-on-year increase in the median cost of homes for sale. According to the price index report released by the real estate portal Idealista, the national median price has reached €2,943 per square meter. This sustained upward trend is occurring within a market context defined by strong buyer demand, which continues to outpace the available residential supply.
The analysis, based on asking prices published on the Idealista platform, indicates a quarterly price rise of 1.6%. The report's methodology involves analyzing offer prices based on built square meters, with atypical listings and those priced outside market norms being excluded to ensure statistical accuracy. The final median value is derived from all valid listings within each specific market.
Price increases were observed across all 19 district capitals and autonomous regions included in the study. The most significant annual growth was recorded in Beja, where prices surged by 33.9%. Other notable increases occurred in Santarém (26.7%) and Guarda (20.5%). In major urban centers, the pace of growth was more moderate, with Porto seeing a 4.3% rise and Lisbon a 2.7% increase. Despite the slower growth rate, Lisbon remains the most expensive city in Portugal to acquire property, with a median price of €5,824 per square meter.
Following Lisbon in the ranking of most expensive cities are Funchal, the capital of Madeira, at €3,879 per square meter, and Porto, at €3,826 per square meter. Other cities commanding high property values include Faro (€3,374/m²), Setúbal (€2,961/m²), and Aveiro (€2,652/m²). Conversely, the most affordable cities for homebuyers are Castelo Branco (€965/m²), Guarda (€983/m²), and Bragança (€1,063/m²).
When analyzed by district and island, the data shows widespread price growth over the last year. The Autonomous Region of the Azores registered the highest regional increase at 18.3%, followed by the Alentejo at 17.3%. The Lisbon Metropolitan Area saw an 8.4% annual increase, reaching a median price of €4,119 per square meter, making it the most expensive region in the country. The Algarve follows closely as the second most expensive region, with a median price of €3,819 per square meter.
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Industry experts attribute the ongoing price pressure to several factors. "The market is still very active, partly due to favorable credit conditions and specific government incentives for younger buyers," stated a market analyst from a leading consultancy firm. "However, the core issue remains the structural imbalance between the high volume of demand and an insufficient pipeline of new housing. This scarcity is the primary driver of the price inflation we are witnessing across the country."
The government has acknowledged the housing challenge, with recent policy discussions focusing on measures to stimulate construction and increase the housing stock. However, the effects of these potential interventions have yet to materialize in the market data. The transaction volume remains high, indicating that buyers are still willing to enter the market despite the rising costs.
The detailed breakdown shows that the price dynamics vary significantly by region. The Autonomous Region of Madeira saw a 14.9% increase, while the North region experienced a more modest 7.3% rise. The only territory to record a price decrease was the island of Santa Maria in the Azores, where prices fell by 2.1% over the past year.
This comprehensive data provides a detailed snapshot of the current state of Portugal's housing market, highlighting a continued trend of appreciation driven by fundamental supply and demand dynamics. The market's behavior in the coming months will likely depend on changes in interest rates, the effectiveness of new housing policies, and shifts in the broader economic landscape.
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