Portugal Leads EU for Property Price Growth in 2025

Portugal recorded the highest property price growth in the European Union in the first quarter of 2025, with a remarkable 16.3% year-on-year increase, well above the EU average of 5.7%.

New analysis by Property Market-Index, a global luxury real estate research firm, reveals that real estate prices in Portugal have surged significantly over the past 12 months.

The country has seen the highest price increases throughout the EU, followed by Bulgaria (15.1%), Croatia (13.1%), Spain (12.3%), and Slovakia (12.2%).

Why Portugal’s Property Market Continues to Outgrow the EU

According to analysis from the leading Property Market-Index representative and international property expert in the latest 2025-26 Portugal Property Hotspots report, Amanda Collison, this growth is not an anomaly but rather the result of a perfect storm of positive fundamentals:

“It’s no surprise that Portugal’s property market is expanding at the current rate, given the strong demand from international investors and digital nomads seeking lifestyle-friendly, tax-efficient jurisdictions.”

“The above is especially true when combined with a shortage of premium housing in key coastal and inland locations in and around Lisbon, the Algarve, and Alentejo, which is intensifying competition and pushing up prices.”

“Relocating families are also significantly placing a premium on quality of life, safety, climate, healthcare, and international education—areas where the country continues to outperform many European peers.”

Collison’s insight and data are supported by the Portuguese Trade & Investment Agency, which has recorded that €13.2 billion was invested in foreign direct investment in the country 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 also accounted for 81% of Portugal’s total real estate investment last year, while foreign residents made up approximately 12% of Portugal’s population as of December 2023. US residents increased 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 also 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.” Says Collison.

For more detailed insights into the latest property hotspots in Portugal, register for Portugal Pathways' upcoming webinar, 'investing in Luxury New Homes in Portugal', taking place on August 26th at 4:00 PM Lisbon Time.

Why Affluent Families and Investors are Buying Property in Portugal

This property market growth is no surprise for Portugal Pathways and Portugal Investment Owners Club, which supports affluent families relocating to the country. Founder and Chairman, Paul Stannard, commented on these findings:

“Portugal continues to stand out as a leading destination for high-net-worth individuals seeking to invest in Portugal’s luxury new homes market. The property market in Portugal has evolved over the last five years, with building standards significantly improving as developments offer families much more choice than just holiday villas for rent.”

“There are so many affluent families and value creators coming to Portugal from the US and the UK and other countries who want properties for investment and family homes, but also very often as a base for them to work internationally.”

“Prime real estate markets in and around metropolitan Lisbon, Porto, the Silver Coast and the Algarve add to the country’s appeal, offering lifestyle and investment value in equal measure.”

“Portugal’s combination of economic stability, cultural richness, investor-friendly tax environment, and the ever-popular Golden Visa residency by investment programme makes it especially attractive.”

“The revised Golden Visa framework still holds strong investor appeal, granting residency in Portugal and visa-free travel across the EU Schengen area in exchange for a €500,000 investment in regulated Portuguese alternative investment funds.”

“Although direct real estate purchases no longer qualify for the Golden Visa residency by investment programme, investors can now channel funds into high-growth sectors such as clean energy, healthcare, tech, tourism, media, and hospitality.”

You can learn more about Portugal’s Golden Visa residency by investment programme at Portugal Pathways’ latest webinar, ‘Securing Portugal’s Golden Visa in 2025’.

Property Market-Index’s findings are heavily supported. According to a recent 2024 Ernst & Young survey, 84% of investors said they plan to establish or expand operations in the country over the next year, compared to 72% for the rest of the Eurozone.

77% of respondents also expected Portugal's attractiveness to improve over the next three years, compared with just 49% three years ago. Based on the same metrics, this would overtake the Eurozone, which had been at 67% last year.

CaixaBank Research projects Portugal's GDP to grow by 2.4% in 2025, significantly higher than the Eurozone's projected growth of 0.8% and 1.3% over the same period.

Comparatively, the UK Treasury's April 2025 survey of independent forecasts indicates an average growth expectation of 0.8% for 2025, underscoring Portugal's stronger economic trajectory.‍

The Property Hotspots in Portugal to Invest in Upmarket Real Estate

Property Market Index’s latest report ranked property hotspots in Portugal based on their capital growth potential, cultural and educational offerings, heritage, robust investment opportunities, land availability, infrastructure, connectivity, amenities, health and well-being, sustainability, safety and security.

Collison provided insight into which hotspot locations in Portugal investors and relocators should look out for based on the updated report.

“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.”

“The Algarve saw 13.8% growth in real estate prices last year, with the average price per square meter 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 meter.”

“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.”

For support researching luxury real estate in Portugal for any of these property hotspots, contact Portugal Pathways to arrange a meeting with one of our real estate specialists here.

You can also access the full Property Market-Index report here.