Portugal's Housing Supply Crisis: Inventory Nears Historic Lows in Lisbon and Porto, Driving Prices Up

Portugal's Housing Supply Crisis: Inventory Nears Historic Lows in Lisbon and Porto, Driving Prices Up

The supply of homes for sale in Portugal is currently just 5% above the historic minimum recorded in the third quarter of 2022, according to a new market analysis released by the real estate portal Idealista. The data, corresponding to the second quarter of 2025, reveals that strong sales momentum is quickly depleting the available housing stock, a trend that is particularly pronounced in the country's major urban centers and islands. This scarcity is a key factor contributing to the ongoing pressure on housing prices across the nation. The report indicates that several regions reached their all-time lows for available property listings during the second quarter of 2025. The districts of Aveiro, Coimbra, and Lisbon, as well as the island of Madeira and the city of Santarém, all registered the lowest number of homes for sale in their history.

The analysis provides a detailed geographic breakdown of the supply constraints. In the Azores, the island of São Miguel has a housing stock that is only 3% above its minimum level from the first quarter of 2025. The district of Setúbal, part of the Lisbon metropolitan area, has just 4% more homes on the market than it did at its lowest point at the end of 2022. In the Porto district, the housing supply is currently 12% higher than the minimum recorded in the summer of 2022, still indicating a significantly tight market. This data highlights a persistent imbalance between supply and demand in Portugal's most sought-after locations. The rapid absorption of both new and used homes suggests that buyer activity remains robust despite higher interest rates.

While the primary urban markets are experiencing significant inventory shortages, the report notes a different trend in some interior regions. The district of Guarda, for instance, has seen its housing stock increase by 72% compared to its minimum in the first quarter of 2021. Similarly, Bragança has 55% more properties for sale than in the second quarter of 2019. However, these localized increases do not offset the critical shortages in the main metropolitan areas. Among the country's largest cities, Lisbon, Funchal, Coimbra, and Beja all hit their historic inventory lows in the second quarter of 2025. The city of Porto's housing stock is 36% above its minimum from the summer of 2023, showing more of a recovery than Lisbon but still reflecting a competitive environment for buyers.

The findings from Idealista's data team underscore the structural challenges facing the Portuguese housing market. The reduced supply of homes for purchase, especially in high-demand areas, is expected to continue influencing both housing affordability and the evolution of property prices. For market observers and potential buyers, this data confirms that competition is likely to remain fierce. The report concludes that the limited inventory will be a defining characteristic of the Portuguese real estate landscape in the near future, impacting strategic decisions for both individual homebuyers and professional investors. Stay informed on Lisbon property market developments at realestate-lisbon.com.