Portuguese House Prices Rise 21.6% in August, the Largest Increase Since 1991
The sale price of houses in Portugal recorded a year-on-year increase of 21.6% in August, a figure that represents the most significant rise in nearly 34 years. According to the Residential Price Index released this Wednesday by Confidencial Imobiliário, this surge breaks a long-standing record from November 1991, when prices saw a 21.1% growth. The data confirms a powerful acceleration in the housing market throughout 2025, with the pace of price increases almost doubling in just eight months, from 11% at the end of 2024.
This new growth level is the result of a pattern of strong monthly increases registered over the course of the year. With the exception of May, which saw a modest 0.2% change, month-over-month variations have consistently been near 2.0%. The month of August continued this trend, posting a 1.8% increase in prices compared to July, reaffirming the market's strong momentum through the summer season. This sustained appreciation reflects ongoing high demand across both new and existing housing stock.
Data from the SIR-Sistema de Informação Residencial indicates that market activity remains robust, with transaction levels consistent with the first two quarters of the year. It is estimated that approximately 41,000 homes were sold between June and August 2025. During this three-month period, the average transaction price reached €2,753 per square meter. The market continues to show a clear distinction between property segments, with new construction homes being sold at an average of €3,453 per square meter, while used homes traded at an average of €2,629 per square meter.
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Industry experts note that the sharp increase in prices is driven by a structural imbalance between supply and demand, which has been exacerbated by rising construction costs and a steady influx of foreign buyers and residents. A spokesperson for a leading real estate association commented, "The market is experiencing significant pressure. While demand remains exceptionally strong, the available housing stock, especially in major urban centers like Lisbon and Porto, is insufficient to meet it. This fundamental mismatch is the primary driver of the price escalation we are currently witnessing."
The government has acknowledged the challenges posed by the rapid price increases, particularly for local buyers. However, the market's performance also highlights its attractiveness to international investors, who continue to see Portugal as a stable and promising location for real estate investment. The performance of the new housing segment, in particular, points to a strong appetite for high-quality, modern properties. The figures from Confidencial Imobiliário provide a clear snapshot of a market in a phase of historic expansion, with no immediate signs of a slowdown in price growth.
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