Portuguese Property Prices Surge 17.7% in June, Hitting Highest Growth Rate Since 2022
The Portuguese residential property market has registered its most significant year-on-year price increase since the end of 2022, with housing values climbing 17.7% in June, according to the latest Residential Price Index from Confidencial Imobiliário. This pronounced growth is a direct result of accelerating monthly price hikes observed throughout the first half of 2025, which have progressively pushed the annual growth rate from 11.0% at the close of 2024 to its current high. The data underscores a period of intense valuation and sustained market activity across Portugal Continental.
The analysis, based on reported housing transaction prices, indicates that the market has maintained a strong and consistent upward trend. In June, the month-on-month price variation was a robust 1.8%, reinforcing the pattern of monthly increases around the 2.0% mark seen earlier in the year. This followed a brief and isolated moment of stabilization in May, which saw a marginal monthly variation of just 0.2%. The second quarter of 2025 concluded with a cumulative price increase of 3.4% compared to the first quarter, confirming the market's dynamic trajectory.
According to projections from the SIR-Sistema de Informação Residencial (Residential Information System), Confidencial Imobiliário estimates that the second quarter of this year saw approximately 40,450 housing transactions in Portugal Continental. This volume is consistent with the transaction patterns established in recent quarters, indicating stable and high demand in the market. The average sale price for residential properties during this period reached €2,778 per square meter (€/m2).
A deeper look into the market segments reveals a significant price disparity between new and existing properties. The average price for new-build homes stood at €3,771/m2, reflecting strong demand for modern housing and the rising costs of construction. In contrast, the average price for used homes was €2,559/m2. This gap highlights the different market dynamics at play, with new developments commanding a substantial premium while the second-hand market offers a more accessible entry point for many buyers.
The data is compiled by Confidencial Imobiliário, a leading independent company specializing in the production and dissemination of real estate market analysis, using data from sources including the SIR-Sistema de Informação Residencial. The index tracks the evolution of transaction prices for residential properties, providing a crucial barometer for the health and direction of the Portuguese housing market.
Industry experts note that this acceleration is fueled by a combination of factors, including sustained international demand, a resilient domestic buyer base, and a supply that has yet to catch up with demand in key areas. A senior economist at a major Portuguese bank stated, "The 17.7% figure is remarkable and confirms that the fundamentals of the Portuguese property market remain incredibly strong. While this presents challenges for affordability, it signals a high-confidence environment for investors."
The government has been monitoring the housing market closely, with recent policy discussions centered on increasing housing supply to mitigate the rapid price increases. However, the impact of these measures is not expected to be felt in the short term, suggesting that the current market trends may persist in the coming months. The Bank of Portugal has also highlighted the rapid price growth in its recent financial stability reports, advising both banks and consumers to be cautious with lending and borrowing.
Historically, the Portuguese property market has seen cyclical periods of growth, but the current phase is characterized by its intensity and resilience, even in the face of broader European economic uncertainties. The period following the 2008 financial crisis and the subsequent sovereign debt crisis saw a prolonged downturn, but the recovery since 2014 has been robust, driven significantly by foreign investment and tourism-related demand.
Looking ahead, Confidencial Imobiliário will continue to release its monthly and quarterly price indices, with the next set of data expected to provide further clarity on whether this high rate of growth can be sustained through the third quarter. Market participants will be watching closely to see if transaction volumes remain high and if the pace of price appreciation begins to moderate.
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