Portuguese Real Estate Prices Accelerate to Record 17.2% Growth in Second Quarter
The Portuguese National Statistics Institute (INE) has announced a significant acceleration in the nation's housing market, with prices surging by 17.2% in the second quarter of 2025 compared to the same period last year. This new record high, published on Monday, indicates a market expansion that has surpassed the expectations of many financial analysts and points to sustained momentum in the property sector. The year-over-year increase marks an acceleration of nearly a full percentage point from the first quarter's growth rate.
The official data is compiled by the INE through the House Price Index (IPHab), which utilizes anonymized administrative information from the Tax and Customs Authority, specifically from the Municipal Tax on Onerous Transfers of Real Estate (IMT) and the Municipal Property Tax (IMI). This methodology ensures a comprehensive and accurate reflection of market transactions. Economists at BPI bank, in a research note, described the growth as “very strong,” admitting the official figures were considerably higher than their own forecasts of around 14%.
In concrete terms, the number of housing transactions between April and June 2025 reached 42,889 units. This represents a 15.5% increase over the same period in 2024 and a 3.7% rise from the previous quarter. The total value of these transactions amounted to €10.3 billion, marking a remarkable 30.4% increase year-over-year, underscoring not only a higher volume of sales but also a significant rise in the value of properties being traded.
The analysis from BPI economists suggests that the primary drivers for demand seen in 2024 have carried over into 2025, supporting the continued expansion. The report highlights a stable macroeconomic climate, where the containment of a potential tariff conflict between the Eurozone and the United States has reduced economic uncertainty. This stability has allowed the European Central Bank (ECB) to maintain interest rates at what are considered neutral levels, fostering a predictable lending environment.
Portugal's domestic economy provides a further pillar of support. The labor market is performing strongly, with employment figures at historical highs, a low rate of unemployment, and a notable increase in real wages. These conditions bolster consumer confidence and the financial capacity of households to invest in property. This positive domestic picture is further stimulated by government policies, including tax exemptions and public guarantees designed to facilitate homeownership for young buyers.
On the supply side of the market, the pace of new construction has shown signs of acceleration throughout 2025. However, the report from INE clarifies that the current output of new housing units remains significantly below the levels recorded during the first decade of the 21st century. This persistent gap between the robust demand and the available housing stock continues to be a primary factor exerting upward pressure on prices across all market segments.
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Industry experts have weighed in on the findings. A senior analyst from a leading real estate consultancy in Lisbon commented, “The data confirms the underlying strength of the Portuguese property market. The confluence of strong demand, favorable economic conditions, and a structural supply deficit creates a classic scenario for price appreciation. We are seeing this play out not just in major hubs like Lisbon and Porto, but across the country.”
The government has not yet issued a formal response to the latest statistics. However, the data will likely be a key point of discussion in upcoming policy meetings concerning housing and economic strategy. The sustained price growth presents both opportunities for economic wealth creation and challenges related to housing affordability for the local population, a balance the government is continually working to address.
Looking back, the current growth trajectory places the Portuguese real estate market in a historically strong position. The consistent double-digit price increases over recent quarters reflect a significant recovery and expansion phase following previous economic cycles. This trend has solidified Portugal's reputation as one of Europe's most dynamic and resilient property markets.
The INE is expected to release its next quarterly report in December, which will provide further insights into whether this powerful trend will continue through the second half of the year. Market watchers will be closely observing indicators such as construction permits, mortgage approvals, and international investment flows to gauge future direction.
[Stay informed on Lisbon property market developments at realestate-lisbon.com.]