Portuguese Property Prices Continue Upward Trend, Surpassing €2,900 per Square Meter in July
The Portuguese real estate market continues to show robust growth, with the median cost of purchasing a home reaching €2,926 per square meter at the close of July 2025, according to the latest price index from the property portal Idealista. This figure marks an 8.5% increase compared to July 2024 and a 3.9% rise from the previous quarter, signaling sustained momentum across the country. The data indicates that price appreciation is not confined to major urban centers, with several regional capitals experiencing the most significant surges.
A detailed breakdown of price movements reveals that 17 district capitals saw prices climb in July. The most substantial year-on-year increases were not in Lisbon but in Santarém, which recorded a remarkable 24% jump. Setúbal and Guarda followed with strong growth of 20.8% and 18.5%, respectively. Other notable increases were seen in Ponta Delgada (13.1%), Évora (12.1%), and Viana do Castelo (10.7%). In contrast, Lisbon, while still the nation's most expensive city, saw a more moderate increase of 3.5%. This trend highlights a broadening of the market's strength beyond its traditional core.
Lisbon continues to command the highest property values, with an average price of €5,829 per square meter. Following the capital are Porto at €3,804 per square meter and Funchal at €3,679 per square meter. The analysis by Idealista shows a clear hierarchy of markets, with Faro (€3,264/m2) and Setúbal (€2,920/m2) also ranking among the priciest locations. On the other end of the spectrum, cities like Portalegre (€871/m2) and Castelo Branco (€906/m2) offer the most affordable entry points into the Portuguese property market.
When analyzing the data by districts and islands, the price dynamics show even greater variation. The island of São Miguel in the Azores led the pack with a 25% increase, followed by the island of Porto Santo (23.4%) and the district of Beja (20.7%). The district of Lisbon saw an 8.1% increase, on par with Viseu. This granular data suggests that investment appeal is diversifying, with island and rural locations gaining significant traction. The most expensive districts remain Lisbon (€4,451/m2) and Faro (€3,753/m2), reflecting their established popularity among international buyers and tourists.
Over the past year, every region in Portugal has experienced a rise in house prices. The Autonomous Region of the Azores reported the highest growth at 19.7%, with the Alentejo (15.5%) and the Autonomous Region of Madeira (13.6%) also posting strong double-digit gains. The Lisbon Metropolitan Area, the most expensive region at €4,111 per square meter, grew by 9.8%. This widespread growth underscores the national scope of the current real estate boom, moving beyond the historically dominant markets of Lisbon and the Algarve.
Real estate analysts note that these figures reflect several contributing factors, including sustained foreign demand, a resilient domestic economy, and a structural lack of housing supply in key areas. A representative from a leading real estate consultancy in Lisbon stated, "The data confirms that while Lisbon remains the crown jewel, the entire Portuguese market is undergoing a significant revaluation. Investors are clearly seeing value in secondary cities and regions, which is driving the exceptional growth rates we are observing in places like Santarém and the Azores."
The mortgage market has remained relatively stable, though lending conditions are being closely watched by institutions like the Bank of Portugal. Buyer behavior indicates a continued urgency to enter the market, with many acting quickly on available properties despite the rising prices. Property developers are responding to the demand, but the pace of new construction has yet to catch up with the market's needs, particularly in the affordable housing segment. Local governments are under increasing pressure to streamline planning permissions to help alleviate the supply-side constraints.
Based on current indicators, the price trajectory for Portuguese real estate is expected to continue its upward path, albeit potentially at a more moderate pace in some of the overheated markets. The continued growth in tourism and the country's appeal to expats and digital nomads are expected to provide a solid foundation for the market in the coming months. The government has not announced any immediate policy changes in response to the latest figures, but the topic of housing affordability remains a key point of public and political discussion.
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