House prices in Portugal soar 18.7% in the first quarter, the biggest rise in six years

The Portuguese property market recorded the biggest price increase in the first quarter of 2025 since INE, the National Statistics Institute, began measuring this data in 2019, with four municipalities exceeding 20% year-on-year growth. The Greater Lisbon region continues to have the highest prices, while the volume of transactions grew by 24.9%.

With a year-on-year change of 18.7%, the median price per square metre of houses sold in Portugal accelerated from the 15.5% recorded in the previous quarter, setting a new all-time record.

This increase represents “the highest variation since the beginning of the series (1st quarter of 2019)”, according to the official INE document released on Tuesday, confirming what many analysts in the sector had already anticipated: the Portuguese property market continues on an unstoppable upward trajectory, even in the face of the uncertain global economic scenario.

The median price of the 40,163 family homes sold in Portugal in the first quarter stood at 1,951 euros per square metre (€/m²), which is also an increase of 4.3% compared to the last quarter of 2024.

In addition, the INE figures show that between January and March the number of family housing transactions in Portugal increased by 24.9% compared to the same quarter last year, despite being 9% below the more than 44,000 transactions carried out in the last quarter of 2024, following the seasonal pattern typical of the property sector, where the beginning of the year traditionally sees less activity.

Price rises exceed 20% in four municipalities

“The sub-regions with the highest median house prices — Greater Lisbon, Algarve, the Autonomous Region of Madeira, Setúbal Peninsula and the Porto Metropolitan Area — also had the highest values in both categories of the buyer’s tax residence (national and foreign territory)”, emphasises the INE report, showing how the most sought-after areas continue to concentrate both national and foreign investment.

The municipal analysis reveals that “housing prices accelerated in 16 of the 24 municipalities with more than 100,000 inhabitants” in the first quarter, with five municipalities standing out by registering increases of more than 20% year-on-year. Santa Maria da Feira led the pack with an impressive 27.0% rise, followed by Maia (22.7%), Guimarães (22.7%) and Vila Nova de Famalicão (22.6%). Oeiras, with 21.4%, completes the group of municipalities with the highest acceleration.

INE also points out that “the municipalities of Santa Maria da Feira (up 15.8 percentage points) and Cascais (up 14.8 percentage points) showed the biggest increases” when comparing the year-on-year change in the first quarter of 2025 with the fourth quarter of 2024, demonstrating how price dynamics vary significantly between different territories.

On the other hand, “the biggest decrease in the year-on-year rate of change occurred in the municipality of Funchal (down 30.2 percentage points)”, while “the municipalities of Lisbon and Porto recorded decreases of 1.1 percentage points and 2 percentage points respectively in the year-on-year rates of change from the fourth quarter of last year to the first quarter of 2025”, suggesting some stabilisation in the main urban centres.

At the top of the hierarchy of the highest prices, the municipalities of Lisbon (4,492€/m²), Cascais (4,477€/m²), Oeiras (3,983€/m²), Porto (3,066€/m²) and Odivelas (3,048€/m²), all above the 3,000€/m² mark. Analysing by sub-region confirms the dominance of Greater Lisbon, which leads the way with 3,183€/m², followed by Algarve (2,929€/m²), the Autonomous Region of Madeira (2,518€/m²), the Setúbal Peninsula (2,325€/m²) and the Porto Metropolitan Area (2,154€/m²).

At the other end of the spectrum, “the Beiras e Serra da Estrela sub-region had the lowest median sales price for family housing (698€/m²)”, highlighting the gap between the interior and the coastal and metropolitan areas.

One of the most significant aspects of INE’s data for the first quarter is the fact that “the median house price increased, compared to the same period in 2024, in the 26 NUTS III sub-regions, with Alto Alentejo standing out with the highest growth (51.6%)”. This generalisation of increases confirms that the inflationary pressure on the property market has spread throughout the country.

INE also emphasises that “in the first quarter of 2025, the lowest year-on-year growth in house prices (4.5%) was recorded in the Alto Tâmega e Barroso sub-region”, but even this more modest variation represents substantial growth in a context of controlled inflation.

Impact of foreign buyers

The INE document also reflects the impact of foreign buyers on the national market. “In the first quarter of 2025, the median value of households transacting in Portugal involving buyers with tax residence abroad was 2,573€/m² (14.5% more than in the same quarter of the previous year) and that of transactions involving buyers with tax residence in Portugal was 1,931€/m² (19.5% more than in the same quarter of the previous year)”.

Particularly relevant is the fact that “in the Greater Lisbon and Oporto Metropolitan Area sub-regions, the median price (€/m²) of transactions made by buyers domiciled abroad exceeded the price of transactions by buyers domiciled in Portugal by 52.5% and 32.3%, respectively”, which shows how foreign investment continues to be a factor putting pressure on prices in the most sought-after areas.

The data for the first quarter of 2025 confirms that the property market continues on a path of strong growth, fuelled by robust demand from both home and abroad. The generalisation of increases to all regions of the country shows that pressure on prices is no longer a phenomenon exclusive to large metropolitan areas.

The acceleration to 18.7% in year-on-year price growth, the highest since 2019, raises important questions about the sustainability of this pace of growth, especially in a context where access to housing is becoming increasingly challenging for Portuguese families.

In addition, the 24.9% increase in the number of transactions shows that, despite high prices, the market remains liquid, suggesting that both demand for home ownership and property investment remain active.

The municipal data also shows that areas on the outskirts of large cities continue to see the highest growth in family housing prices, reflecting strategies to find more affordable alternatives to the prices charged in urban centres.