Despite persistent global economic challenges, Portugal's luxury property sector is demonstrating remarkable strength, driven by vigorous demand from both domestic and international buyers.
This resilience is further cemented by escalating rental values, which continue to bolster investor confidence.
In a clear sign of market vitality, Portugal Sotheby’s International Realty reported a 34% increase in transaction volumes during the first five months of 2025 compared to the same period in 2024. British buyers were a significant force, accounting for 11% of all transactions, with purchasers from the United States (9%) and Brazil (6%) following closely behind.
The growing international appeal of Portugal is reflected in its population demographics. As of the beginning of 2024, foreign nationals constituted around 12% of the country's population. Notably, the number of U.S. residents has climbed to almost 21,000, marking a dramatic increase of over 340% in just five years.
This surge in real estate activity is concentrated in key areas celebrated for their coastal settings, cosmopolitan lifestyles, and high quality of life, including Lisbon, Cascais, Estoril, Oeiras, Porto, the Algarve, and Madeira. Property specialists in these markets consistently report a “consistent increase in the value of their assets.”
The strength of the market is not limited to sales. Recent figures from the National Statistics Institute (INE) reveal a significant rise in rental prices. By March, the median rent for new tenancy agreements had reached €8.22 per square metre, a 10% uplift from the previous year.
This growth in rental yields, especially in prime locations, highlights the housing market's dual appeal for both homeowners and investors seeking returns.
Greater Lisbon commands the country's highest rents at €13.16/m², with Madeira (€10.44/m²), the Setúbal Peninsula (€10.24/m²), the Algarve (€9.92/m²), and the Porto Metropolitan Area (€9.12/m²) also showing strong figures. The city of Lisbon itself registered the highest median rent among Portugal's 24 largest municipalities, at an impressive €16.00/m².
Interestingly, while the total number of new rental contracts across the nation fell by 10.4%, sustained demand and tightening supply led to year-on-year rent increases in 23 of the 24 major municipalities. Gondomar saw an exceptional 24.4% rise, while Setúbal and Barcelos bucked the national trend with modest growth in new contracts.
Buyer preferences vary by region. In Porto, international clients—chiefly from France, the US, and Brazil—often enter the market by purchasing luxury one or two-bedroom flats in the city centre before moving towards larger, high-end properties. In Lisbon and its environs, the demand is for properties with outdoor space in central or fashionable, up-and-coming neighbourhoods like Marvila.
Further south in the Algarve, new direct flight routes from the United States have fuelled American interest. Meanwhile, Madeira continues to be a magnet for families and buyers from Northern Europe and the US, who are drawn to its security, mild climate, and superior quality of construction.
Paul Stannard, chairman and founder of Portugal Pathways and the Portugal Investment Owners Club, commented on the trend: “These figures come as no surprise. Portugal’s luxury property market continues to go from strength to strength with increasing appeal to international investors. We continue to see positivity towards Portugal from international investors, and this is reflected in the luxury real estate market.”
This investor optimism is supported by a recent Ernst & Young (EY) survey, which found that 84% of entrepreneurs intend to expand or establish operations in Portugal. This figure significantly outpaces the Eurozone average of 72% and the UK's 69%. The same report noted that 77% of global executives anticipate Portugal's investment appeal will improve over the next three years, compared to 67% for the wider Eurozone and 59% for the UK.
Furthermore, the 2025 Mid-Year Luxury Outlook, which analyses transactions exceeding $10 million (€8.5 million), indicates that top-tier property remains a reliable investment for high-net-worth individuals navigating a volatile global economy.
With a lower cost of living than most Western European nations, over 300 days of sunshine a year, and a dynamic entrepreneurial scene, it is easy to see why people from around the world are choosing to relocate to Portugal.
As property values and rental yields both follow a strong upward trajectory, the country is firmly established as a prime destination for discerning buyers seeking lifestyle, location, and long-term value.
About Portugal Investment Owners Club
The Portugal Investment Owners Club, or P Club for short, is a unique investor membership community designed for discerning individuals, families, and organisations committed to exploring and capitalising on life in Portugal and enjoying money-can't-buy experiences and exclusive events.
About Portugal Pathways
Portugal Pathways has supported hundreds of Golden Visa residency-by-investment applications and provides expert guidance through its professional supply chain network on luxury property, wealth management, and tax optimisation, including post-NHR tax regime planning, as well as private healthcare, IFICI tax incentive applications, money transfers and bespoke relocation solutions to enhance life and investments in Portugal.
Disclaimer: The information on the Portugal Pathways and Portugal Investment Owners Club (P Club for short) websites and in email communications is for general informational purposes only and should not be construed as legal, tax, or financial advice. You should consult and check with a qualified professional advisor before relying on any information provided on this website or in email communications. As it relates to investments in Golden Visas or other wealth management solutions offered by regulated and professional advisors, it is important to note that past performance is no guarantee of future returns. Private equities can be highly illiquid and come with risk and should always be under professional independent advice. Golden Visa investments need to be held for 6 to 7 years to allow for permanent citizenship/passport in the EU.
