Portuguese House Prices See Record 17.2% Annual Increase in Second Quarter
The National Statistics Institute (INE) made a price change announcement on Monday, revealing that Portuguese house prices grew at their fastest rate on record during the second quarter of 2025. The data shows a year-on-year price acceleration of 17.2%, underscoring the intense momentum in the national property market. This surge continues a trend of almost uninterrupted price growth over the past decade.
A detailed breakdown of price movements by property type shows that both new and existing homes experienced record-setting appreciation. The prices for existing homes surged by 18.3%, while newly constructed properties saw their values increase by 14.5%. These figures indicate that demand is strong across all segments of the market. The total value of transactions in the quarter exceeded €10 billion for only the second time ever.
Several factors are seen as contributing to the price changes. The INE report points to government support measures for young buyers, such as a public guarantee for housing loans and an exemption from the IMT transfer tax, as significant drivers. Additionally, a period of easing interest rates from the European Central Bank (BCE) has improved access to mortgage financing, further stimulating demand. Real estate agency reports and market observations have consistently highlighted a severe housing supply crisis as a fundamental factor behind the rising prices.
Need Expert Guidance?
Get personalized insights from verified real estate professionals, lawyers, architects, and more.
Buyer and seller behavior in response to price changes has been robust. Despite the escalating costs, the number of transactions increased by 15.5% compared to the same period last year, with 42,889 homes sold. This indicates that buyers are still entering the market in large numbers, willing to meet the higher price points. The data also revealed a strengthening trend of domestic buyers, who accounted for nearly 92% of all transactions, up from 87% two years ago.
The mortgage market response and lending conditions have been favorable, supporting the high volume of transactions. The government has recently responded to the supply issue by announcing a €1.34 billion credit line with the European Investment Bank to construct 12,000 new homes and approving the sale of state-owned properties for residential development. However, these measures have yet to temper the market's price trajectory. The expected price trajectory, based on current indicators of high demand and insufficient supply, suggests that upward pressure on prices will likely continue in the near term. Stay informed on Lisbon property market developments at realestate-lisbon.com.