Portugal Achieves Top 3 Global Ranking in Q1 2025 House Price Growth
Portugal’s housing market demonstrated significant strength in the first quarter of 2025, with a nominal year-on-year price growth of 16.9%, placing it third among 55 markets surveyed in the latest Knight Frank Global House Price Index. The findings, released locally by Knight Frank's associate Quintela + Penalva, show a robust and sustained increase in property valuations across the country. This performance represents the highest level of growth recorded since the second quarter of 2024.
The data indicates that after adjusting for inflation, the real-term appreciation in Portuguese property prices was 14.8%. This places Portugal behind only Turkey, which saw a 32.2% real-term increase, and North Macedonia at 22.6%. Portugal surpassed other European nations in the ranking, including Bulgaria (15.1%) and Croatia (13.1%). The report also highlighted strong short-term momentum, with the Portuguese market registering a 5.7% price growth compared to the final quarter of 2024, consolidating the trend of appreciation.
Globally, the average nominal price increase across the 55 analyzed markets was 2.3% compared to the same period in the previous year. While this is a notable recovery, the report clarifies that this rate remains below the long-term trend of 5.1%. The growth is attributed primarily to the reduction in financing costs following cuts in interest rates on a global scale. However, persistent inflation, particularly in Europe and North America, resulted in the average real growth remaining in negative territory at -0.4%.
Francisco Quintela, a founding partner of Quintela + Penalva, commented on the results, stating that 'Portugal has definitively entered the radar of foreign investors who are seeking investment opportunities or a second home.' He also observed that 'the national client is also increasingly demanding, looking for quality and distinctive projects.' This dual pressure from both international and domestic buyers is a significant factor contributing to the market's dynamism. The growth in demand has reportedly fueled the expansion of specialized services catering to clients with high financial involvement.
The report provides a broad overview of global housing market trends, noting that 87% of the markets included in the index recorded positive annual price increases in nominal terms. In contrast, some markets, such as Mainland China and Hong Kong, experienced significant declines of -7.5% and -6.5%, respectively. The data underscores Portugal's standout performance within a complex and varied international real estate landscape.
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