Portuguese Housing Prices Rise 8.4% Year-on-Year in August
The price of housing for sale in Portugal registered an 8.4% increase in August compared to the same month in 2024, establishing the median cost at 2,951 euros per square meter (€/m2). According to the price index from the real estate portal Idealista, this figure also represents a 3.5% increase on a quarterly basis. The report attributes the continued upward trend to a persistent imbalance between limited housing supply and strong buyer demand. This dynamic is further amplified by more favorable housing credit conditions and the significant public adoption of new government support measures for young buyers, which include an exemption from the IMT transfer tax and a public guarantee scheme for mortgages. The data indicates that prices rose across all 18 analyzed district capitals. The most significant annual increases were observed in Beja (33%), Santarém (29.6%), and Guarda (20%). However, Lisbon remains the most expensive city for purchasing a home in the country, with a median price of 5,866 €/m2. Following the capital are Porto (€3,811/m2) and Funchal (€3,755/m2), which rank as the second and third most expensive cities, respectively. An economist from a major Portuguese bank commented on the findings, stating, “The market dynamics reflect a structural shortage of housing that has yet to be addressed. While demand-side incentives are impactful, they also contribute to price inflation in the absence of a proportional increase in supply.” The analysis by districts and islands shows that the Lisbon district leads as the most expensive area to buy a home, with a median cost of 4,502 €/m2. It is followed by Faro (€3,792/m2), Madeira Island (€3,536/m2), and Setúbal (€3,037/m2). On a regional level, every part of the country saw year-on-year price growth. The Autonomous Region of the Azores reported the highest increase at 17.3%, followed by the Alentejo at 16.4%. The Lisbon Metropolitan Area registered a 10.1% price hike, while the Algarve saw prices climb by 9.4%. A representative from a national real estate association noted, “We are seeing sustained interest from both domestic and international buyers. The government's support for young buyers has certainly stimulated the market, but the core issue remains the speed of new construction, which is not keeping pace with demand.” The report from Idealista is compiled based on the analysis of asking prices for properties listed on its platform, with statistical methods applied to ensure data accuracy by removing atypical listings and those with prices far from market value. The median value is used to provide a representative figure for each market segment. Stay informed on Lisbon property market developments at realestate-lisbon.com.
