House prices see a significant increase of 18.7%
## A Booming Housing Market in Portugal
In the first quarter of 2025, Portugal's housing market has witnessed a remarkable surge, with house prices increasing by 18.7% year-on-year, marking the fastest pace since the National Statistics Institute (INE) began recording such data [2][3]. This growth was observed in 16 of the 24 municipalities with over 100,000 inhabitants, with notable increases in Santa Maria da Feira and Cascais [3].
The Greater Lisbon region continues to be the most expensive, while the Beiras e Serra da Estrela region remains the most affordable [3]. In terms of transactions, over 41,000 homes were sold between January and March 2025, marking a 25% increase compared to the same period in 2024 [2]. However, the housing supply did not grow proportionally, leading to increased price pressures across the country [2].
### Foreign and National Buyers
The government's introduction of a public guarantee scheme allowing young buyers to access mortgages covering up to 100% of a property's value has boosted demand, with 44% of mortgage credit for young buyers issued under the program in Q1 2025 [2]. However, the specific impact on foreign buyers is less detailed in recent trends.
The appeal of Portugal's Golden Visa program and favourable weather continue to attract foreign investors, although recent data does not specifically highlight shifts in foreign buyer dynamics compared to national buyers.
### Regional Highlights
- Lisbon: Remains the most expensive market, with prices averaging €4,492 per square metre [3]. - Porto: Prices average around €3,066 per square metre [3]. - Algarve: Prices are generally lower but still competitive due to its popularity among tourists and expats, with rent yields around 5-6% [1]. - Alto Alentejo: Recorded a significant 51.6% increase in prices, making it an area of interest for investors [3].
### Rental Market Trends
Median rents rose by 10% year-on-year in Q1 2025, reaching €8.22 per square metre [4]. The volume of new lease agreements decreased by 10.4% compared to the previous year, indicating a shift in market conditions [4].
It's important to note that the article does not provide information about the cause of the house price increases or specific trends in regions other than Alto Alentejo and the subregions mentioned in this article. Further research may be required to gain a comprehensive understanding of the current housing market trends in Portugal.
- In the Algarve region, the lower house prices and rent yields around 5-6% make it a competitive yet appealing market for both tourists and expats looking to invest in Portugal's real-estate market.
- The increase in foreign investment in Portugal's housing market can be partly attributed to the country's Golden Visa program, offering residency rights in exchange for financial investments.
- Despite the significant surge in the housing market across Portugal, with foreign and national buyers taking advantage of mortgage programs and finance opportunities, uncertainty remains about the specific impact on foreign buyers as detailed data on their dynamics is less available.
