If you’ve been considering a move to Portugal or are looking for a second home in the sun, the latest housing market figures might just help you make up your mind. Throughout 2024, residential property prices rose sharply, with the pace of growth increasing quarter by quarter. Far from cooling, the market remains active and competitive – especially for homes in high-demand areas.

For many overseas buyers, Portugal represents an attractive combination of lifestyle and value. Good infrastructure, a temperate climate and a relatively affordable cost of living continue to appeal to those seeking either a permanent relocation or a flexible part-time base. When those lifestyle benefits align with a strong housing market, the result is clear: rising prices and growing interest.

Whether you’re considering buying in Lisbon, the Algarve, or an inland town, the data points to a market that remains in motion. Understanding why that is – and what it means for your buying plans – is key to making a confident decision in 2025.

Prices jumped in Portugal in 2024, but that doesn’t mean buyers should avoid the country

House prices rose by 9.1% in 2024

Figures released by the Instituto Nacional de Estatistica show that residential property prices increased by 9.1% over the course of 2024. This brought the national House Price Index (HPI) to 224.44 – its highest recorded level.

The rise marks a significant rebound from the post-COVID period and indicates strong and steady buyer confidence across the country. This growth is even more striking when compared to the commercial property market, where values rose by just 4.7% during the same period. That disparity suggests that both local and international demand remains focused on homes, not shops, offices or industrial space.

Over the past few years, the gap between the residential and commercial markets has widened. In 2021, house prices were rising 4.3 percentage points faster than commercial values; by 2024, that gap had grown to 4.4 percentage points.

For overseas buyers, this is a clear signal that residential property continues to be seen as a more resilient and attractive investment – one tied not just to returns, but to quality of life.

Growth picked up throughout the year

While the annual growth figure of 9.1% is impressive on its own, what’s more revealing is how that figure built up over time. Quarter by quarter, residential price growth gathered pace in 2024.

In the first three months of the year, the annualised rate was 7.0%. By mid-year, it had dipped slightly, but then rose again sharply in the second half of the year – reaching 11.6% by the fourth quarter. This suggests not just a strong market, but one that’s gaining momentum.

In many European countries, price growth slowed or even reversed in 2024 due to interest rate hikes and economic uncertainty. Portugal’s resilience stands out. Factors such as sustained buyer demand, tight supply in popular locations and continued international interest appear to be cushioning the market.

For buyers considering their timing, this kind of quarter-by-quarter analysis can offer more insight than an annual figure alone. It also points to where the market may be headed in 2025.

Across Portugal, there has been growth in the housing market

Most homes are bought by people, not institutions

There is a widespread perception among buyers that institutional investors are dominating residential markets and pushing up prices. In Portugal, the latest data suggests otherwise.

In 2024, households accounted for 134,540 home purchases – a 15.2% increase compared to the previous year. Meanwhile, institutional buyers such as companies, investment funds and foreign corporations made just 21,785 purchases. This means only 13.9% of all residential transactions were carried out by institutions – down from 14.5% in 2023.

This distinction matters. A people-driven market tends to reflect real housing needs – whether for living, retiring or relocating – rather than speculative or short-term investment. It also helps keep the market accessible for individuals and families who want to live in the homes they buy. For those concerned about being priced out, this trend offers some reassurance. Most buyers are seeking the same things you are – a stable home in a welcoming, well-connected country with lasting appeal.

What’s behind the price growth?

A range of overlapping factors explain the upward pressure on house prices in Portugal. At the heart of it is a simple supply-and-demand imbalance.

In high-demand areas such as Lisbon, Cascais and much of the Algarve, housing stock remains tight. New construction has not kept pace with buyer interest – especially for high-quality properties with outdoor space, energy efficiency and access to services. At the same time, both domestic and international buyers are competing for a limited pool of homes.

Portugal also continues to attract attention from lifestyle-motivated buyers. British, Irish, French and German nationals remain among the most active overseas groups. Many are drawn by the climate, relatively low cost of living, good healthcare and slower pace of life.

Although the Golden Visa route via property investment has been phased out, it has left a lasting footprint, particularly in upmarket areas.

Meanwhile, the rise in remote work has increased interest in homes suitable for year-round living rather than short holidays – further pushing demand into new regions.

What it means if you’re planning to buy in 2025

If your plans include buying in Portugal within the next 12 months, the 2024 market data offers useful context. The combination of rising prices and accelerating growth suggests that homes in popular areas are unlikely to become more affordable.

While that doesn’t mean you need to rush, it does imply that holding off in the hope of a downturn may not be a realistic strategy. In today’s conditions, buyers who act decisively are often able to secure better value than those who delay too long.

That said, price growth isn’t uniform across the country. Inland areas, smaller towns and emerging coastal regions continue to offer good opportunities. If you’re flexible on location, you may find attractive homes at prices well below the national average.

The key is to start with a clear sense of budget and priorities. The sooner you begin exploring your options, the more time you’ll have to research, compare and prepare for a confident purchase.

Start planning your move

Planning a property purchase abroad can feel daunting, especially in a market that’s both active and fast-moving. But with the right support, it doesn’t need to be overwhelming.

Our local partners in Portugal can help you navigate each step of the process – from finding the right area and understanding property types to managing legal formalities and currency transfers. Whether you’re still deciding where to buy or are ready to book viewings, we can help you move forward with clarity.

If you’re looking to relocate, invest or find a second home in Portugal, now is a good time to act. Prices are rising, and so is demand. Starting early gives you the advantage of choice – and time to make sure every detail aligns with your goals. Book a free consultation today and take the first step towards owning your home in Portugal.