Portugal to Lead Europe in Real Estate Transaction Growth in 2025, Study Finds
A comprehensive market analysis released by the ERA Group projects that Portugal will experience the most significant increase in real estate transactions among 19 European countries in 2025, with an expected growth of over 10%. The findings, detailed in the ERA Europe Market Survey 2024/2025, attribute this surge to renewed market dynamism and improved financing conditions available to buyers. The study's positive forecast is substantiated by official data from Portugal's Instituto Nacional de Estatística (INE), which reported a 24.9% year-over-year increase in property transactions for the first quarter of 2025.
The ERA Group's research was based on a comparative analysis of market activity and economic indicators across Europe. For 2024, Portugal recorded the fourth-highest growth in transaction volume at 14.5%, surpassed only by Turkey (20%), the Czech Republic (43%), and Luxembourg (48%). In contrast, countries such as France, Austria, and Ireland saw a contraction in transactions, a trend linked to a persistent scarcity of available housing stock that is anticipated to continue. The study's methodology involved surveying market professionals and analyzing national statistical data to build a comprehensive picture of the European property landscape.
In terms of property valuation, the report highlights that Portugal remains one of Western Europe's more accessible markets. The average price per square meter (m2) in 2024 stood at €1,777, which is substantially lower than the 19-country average of €3,558/m2. This positions Portugal favorably against the continent's most expensive markets, including Switzerland (€11,400/m2), Luxembourg (€8,488/m2), and the Netherlands (€4,445/m2). The data underscores a significant value proposition for buyers looking for entry points into the European market.
The geographic breakdown reveals a nuanced picture within Portugal. The capital, Lisbon, is identified as a key driver of the national market, with prices reflecting the broader European trend of urban appreciation. The average price in Lisbon is €4,340/m2, comparable to cities like Prague (€4,555/m2) and Vienna (€4,184/m2). This valuation makes Lisbon more expensive than other major southern European capitals like Rome (€3,200/m2) and Madrid (€3,805/m2). However, these prices remain well below the top-tier markets of Bern (€15,000/m2), Luxembourg city (€12,462/m2), and Paris (€9,557/m2).
The time period comparisons within the report show a consistent upward trend for Portugal over the past 18 months, accelerating in early 2025. This contrasts with the market stagnation observed in several other EU nations. The analysis of market segments indicates that growth is being driven by both residential and commercial property transactions, although the report focuses primarily on the housing market. The luxury segment, particularly in Lisbon and the Algarve, was noted for its strong performance, attracting significant international interest.
An economist from a leading Portuguese bank, who wished to remain anonymous, commented on the findings, stating, 'The data aligns with our internal forecasts. The stabilization of interest rates has unlocked pent-up demand, and we are seeing a clear return of confidence to the market. The key challenge for Portugal will be to increase housing supply to meet this growing demand.' The government has acknowledged these supply constraints, with several policy initiatives aimed at accelerating new construction and bringing more properties to the market, though their effects are yet to be fully realized.
Looking forward, the ERA Group's report provides a positive outlook for 2025, anticipating moderate price growth across most of Portugal. The market is expected to benefit from several key drivers, including more stable interest rates, government incentives for sustainable and energy-efficient renovations, and the widespread adoption of digital platforms that streamline the buying and selling process. However, the report concludes with a cautionary note, emphasizing that structural issues such as access to affordable housing, the overall availability of stock, and disparities in access to bank credit remain significant concerns for the long-term health and sustainability of the Portuguese real estate sector. Future data from the INE and other European bodies will be closely watched to see if these positive transaction trends are sustained through the second half of the year. Stay informed on Lisbon property market developments at realestate-lisbon.com.
