Portugal’s property market is on a trajectory to grow at more than twice the rate of property markets in the European Union, United Kingdom, and North America over the next two years, according to new analysis from global luxury real estate research firm, Property Market-Index.

As of March 2025, Portugal recorded a 15.8% annual rise in house prices, with key regions such as Lisbon, the Algarve, Alentejo, and Porto leading the charge. This surge outperformed broader EU trends, where property price growth is forecast at just 4.5%. The UK is expected to see even slower growth at 2.9%.

In comparison, average UK house prices rose by only 5.3% year-on-year at the end of Q1 2025, while US house prices inched up by just 2.7% amid elevated interest rates and ongoing market uncertainty.

Amanda Collison, spokesperson for Property Market-Index, highlighted several reasons for Portugal’s strong performance:

“During 2024, a significant increase in investments from affluent international investors and relocators has been recorded in Portugal. According to the Portuguese Trade & Investment Agency, €13.2 billion was invested in foreign direct investment in Portugal in the last 12 months, a 19% increase from the previous year. Of this amount, €3.5 billion was attributed to real estate investment.”

“Foreign investors accounted for 81% of Portugal’s total real estate investment in Portugal overall last year, while foreign residents made up approximately 12% of Portugal’s population as of December 2023, with US residents increasing to nearly 21,000 people, representing an increase of over 340% in five years.”

“Macroeconomic implications such as interest rates, US Government uncertainty, and the Ukraine and Israel conflicts have certainly played a significant role in this increasing foreign property interest in Portugal, as more international wealth sees the country as a safe haven to invest in and relocate to.”

“Combining this with the lifestyle and investment opportunities the country offers, as well as safety, security, freedom of access to the twenty-nine EU Schengen region countries, 300 days of sunshine per year, stunning beaches and increasing regeneration investments across Portugal, and it’s clear why property prices are being driven by foreign investment so highly.”

Paul Stannard, chairman of the Portugal Investment Owners Club and Portugal Pathways, echoed these observations based on his first-hand experience:

"Portugal remains a top destination for high-net-worth individuals seeking relocation, thanks to its exceptional safety, rich cultural landscape, favourable tax policies, and the appealing Golden Visa residency-by-investment programme. The country’s thriving luxury real estate market—especially in Lisbon and the Algarve—further enhances its allure."

"The updated Golden Visa residency-by-investment programme continues to appeal to investors, offering dual residency in Portugal and EU Schengen freedom of movement for a €500,000 investment in regulated Portuguese alternative investment funds. While property investments are no longer eligible as part of the Golden Visa programme, funds can still be invested into dynamic sectors such as renewable energy, healthcare, technology, tourism, and hospitality."

“This revised framework may offer greater long-term benefits for Portugal, broadening investment options and opening doors to more impactful sectors. Although luxury property investments are no longer linked to the Golden Visa residency-by-investment programme, they remain highly attractive thanks to the continued strength and resilience of Portugal’s real estate market."

You can learn more about Portugal’s Golden Visa residency by investment programme at Portugal Pathways’ latest webinar, ’Securing EU Residency Through Portugal's Golden Visa’, taking place on June 10th. Click here to register.

The bullish outlook for Portugal’s property sector is further supported by a 2024 Ernst & Young survey, which found that 84% of investors intend to establish or expand operations in Portugal within the next year—substantially higher than the 72% average for the rest of the Eurozone. Furthermore, 77% of respondents believe Portugal’s attractiveness will increase over the next three years, up from just 49% three years ago.

Portugal’s broader economic prospects also look favourable. CaixaBank Research projects GDP growth of 2.4% in 2025, far outpacing the Eurozone average of 0.8% and the UK’s 0.8% forecast, as per the UK Treasury’s April 2025 survey.

In terms of regional property hotspots, the latest Property Market-Index report ranks areas based on potential for capital growth, infrastructure, connectivity, safety, sustainability, and overall quality of life.

“Some of the areas of the Algarve that feature in our property hotspots list include Ferragudo, Carvoeiro, Vilamoura, Vale do Lobo, Quinta do Lago, Faro and Lagos, which are all seeing growing demand for real estate, particularly with investors and wealthy expats,” said Collison.

“The Algarve saw 13.8% growth in property prices last year, with the average price per square metre reaching €3,467 in 2025, reflecting a 9.3% increase compared to the previous year.”

“Meanwhile, Lisbon's luxury districts, such as Avenida da Liberdade, Lapa, and Principe Real, command even higher prices, with new-build properties reaching up to €12,000 per square metre.”

“The Silver Coast area north of Lisbon is still more affordable than the Algarve. Other nearby locations, such as Cascais, Estoril and Sintra, are some of the most sought-after locations for real estate, and this is set to continue with similar growth in property prices to the Algarve.”

“Comporta, which lies southeast of Lisbon, is another real estate hotspot that made our list, along with nearby Alentejo locations Melides and Évora. Foz do Douro sits southwest of Porto in the north and is renowned for its quality of life and history, while Porto and Braga are also performing well and continue to see marginal gains in value based on our data.”

The sustained inflow of international capital, coupled with strong economic indicators and lifestyle appeal, is cementing Portugal’s position as one of Europe’s most attractive real estate markets heading into 2027.

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For more detailed insights into the latest property hotspots in Portugal, you can access the full Property Market-Index report here.

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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.

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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.

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