Porto Property Prices Climb 10.5% Annually, Outpacing Lisbon Market
A new market analysis released this Wednesday by real estate consultancy MVGM reveals a significant acceleration in Porto's residential property market, with sale prices increasing by 10.5% over the last twelve months. The report, covering the second quarter of 2025, indicates that the average transaction price in the city has now reached €4,094 per square meter. This data points to Porto's growing appeal as a primary hub for property investment and residency, with market dynamics showing stronger growth momentum compared to Lisbon.
The findings are based on MVGM's comprehensive quarterly review of Portugal's residential sector, which tracks transaction values and rental prices across the country's main urban centers. The methodology involves analyzing thousands of listings and closed deals to provide a granular view of market performance. The report highlights that Porto's rental segment is experiencing even more robust growth, with an 11% annual increase and a 5.7% rise in the last quarter alone, setting the average rental price at €17.4 per square meter.
In numerical terms, the year-over-year analysis shows Porto's property sale prices climbing from an average of approximately €3,700/m² to the current €4,094/m². The rental market's 11% annual jump is particularly notable for investors, signaling strong demand and potential for high rental yields. In contrast, Lisbon's market, while still growing, shows signs of cooling. The capital saw a 6% annual appreciation in sale prices, reaching an average of €6,650/m², with a minimal quarterly growth of just 0.5%. Lisbon's rental market registered a 3.3% annual increase but saw a slight contraction of 0.4% in the most recent quarter.
The geographic breakdown confirms a tale of two cities. While Lisbon's market appears to be stabilizing after years of rapid expansion, Porto is now entering a phase of accelerated growth. Ana Luisa Santos, Head of Residential at MVGM Portugal, stated, “Porto continues to affirm itself as an attractive alternative, both for investors and for residents, with more accentuated growth, especially in the rental market.” This suggests a potential shift in investment focus towards the northern city.
Comparing the current data to previous periods, the trend becomes clear. Lisbon's previous double-digit growth has tempered, while Porto's growth trajectory is steepening. This dynamic is reshaping the national real estate landscape, positioning Porto as a key driver of future market expansion. The report indicates that this trend is likely to persist in the upcoming quarters as both domestic and international demand in Porto continues to strengthen.
The analysis of market segments shows that the growth in Porto is broad-based, affecting various property types. The rental market's sharp increase, in particular, reflects a tight supply relative to the growing population of students, young professionals, and expatriates drawn to the city. In Lisbon, the high price point may be contributing to the slowdown, as affordability becomes a more significant concern for potential buyers.
Industry experts have taken note of this evolving dynamic. In her commentary, Ana Luisa Santos remarked, “These data reflect a stabilization of the market in Lisbon, after a period of strong valuation. The demand for housing remains high, but cost alterations show adjustments, especially in Lisbon.” Her outlook suggests a sustained period of growth for Porto.
There has been no official response from government bodies regarding these specific statistics, but the data aligns with national strategies aimed at promoting regional development and decentralizing economic activity away from the capital. The market's natural rebalancing towards Porto may be seen as a positive development in achieving this goal.
Historically, Lisbon has been the primary engine of Portugal's property market, attracting the lion's share of foreign investment. However, these latest figures suggest a new chapter is beginning, where Porto plays an increasingly central role. The city's combination of economic dynamism, cultural appeal, and relatively lower entry prices is creating a compelling proposition for investors.
MVGM is expected to release its next quarterly report in three months, which will be closely watched to see if these trends continue to solidify. The ongoing performance of both the Lisbon and Porto markets will be a key indicator of the overall health and direction of the Portuguese real estate sector.
Stay informed on Lisbon and Porto property market developments at realestate-lisbon.com.
