Portugal’s Luxury Property Market Defies Global Uncertainty

Despite ongoing global economic headwinds, Portugal’s luxury property market continues to perform robustly, bolstered by strong domestic and international demand—as well as rising rental values that reinforce investor confidence.

In the first five months of 2025, Portugal Sotheby’s International Realty recorded a 34% rise in the number of transactions compared to the same period in 2024. UK buyers accounted for 11% of all transactions, followed by the United States (9%), and Brazil (6%).

As of the start of 2024, foreign residents made up approximately 12% of Portugal’s population, with U.S. residents increasing to nearly 21,000 people, representing an increase of over 340% in five years.

The surge in activity spans key regions including Lisbon, Cascais, Estoril, Oeiras, Porto, the Algarve, and Madeira—areas prized for their coastal locations, cosmopolitan atmosphere, and quality of life.

Real estate specialists continue to report a “consistent increase in the value of their assets” in these markets.

Supporting this picture of strength, recent data from the National Statistics Institute (INE) shows that rental prices are also on the rise. The median rent for new contracts up to March reached €8.22/m²—a 10% increase compared to the same period last year.

This rental growth, particularly in prime locations, underscores the resilience and attractiveness of the Portuguese housing market not just for homeowners but for investors seeking rental returns.

Greater Lisbon led the country with the highest rents at €13.16/m², followed by Madeira (€10.44/m²), the Setúbal Peninsula (€10.24/m²), the Algarve (€9.92/m²), and the Porto Metropolitan Area (€9.12/m²). Lisbon itself recorded the highest median rent among the country’s 24 largest municipalities, at €16.00/m².

Even as the number of new rental contracts dropped nationally by 10.4%, 23 out of 24 major municipalities still saw year-on-year rental increases, indicating a tightening supply and sustained demand.

Gondomar stood out with a 24.4% rise, while Setúbal and Barcelos recorded modest increases in the number of new contracts, despite the broader decline.

In Porto, international interest—particularly from French, American, and Brazilian buyers—often begins with luxury one- or two-bedroom flats in the city centre, before transitioning to larger, high-end homes.

In Lisbon and surrounding areas, buyers seek properties with outdoor space in central or up-and-coming neighbourhoods like Marvila.

Further south, new direct flight routes from the U.S. have energised American demand in the Algarve, while Madeira continues to attract families and buyers from Northern Europe and the US who value its security, mild climate, and high build quality.

Paul Stannard, chairman and founder of Portugal Pathways and the Portugal Investment Owners Club, said:  

“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.”

Investor confidence in Portugal is at an all-time high, with 84% of entrepreneurs surveyed by Ernst & Young (EY) planning to expand or establish operations in the country, compared to 72% for the Eurozone and 69% for the UK.

The Ernst & Young report also revealed that 77% of global executives expect Portugal’s investment attractiveness to improve over the next three years, surpassing expectations for the broader Eurozone, which are just 67% and 59% for the UK.

The 2025 Mid-Year Luxury Outlook, which focuses on transactions above $10 million (€8.5 million), suggests that high-end property continues to serve as a stable investment vehicle for high-net-worth individuals navigating a changing global market.

It’s no wonder people from across the globe are looking to relocate to Portugal, with a lower cost of living than most Western European countries, over 300 days of sunshine per year, and a thriving entrepreneurial and investment scene.

With both property values and rental yields showing strong upward trends, Portugal remains firmly on the radar of discerning buyers seeking lifestyle, location, and long-term value.

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Contact Portugal Pathways for support with luxury real estate investments in Portugal

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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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