Portugal's property boom shows no signs of cooling as international demand holds firm

The findings come from the newly published Property Market-Index Hotspots Report 2026-2027.

According to the report, median property prices in Portugal — based on bank valuations — climbed to €2,025 per square metre in October, a rise of 17.9% year-on-year. That figure is said to be more than three times the EU's average growth rate of around 5% recorded across 2025, underlining the scale of Portugal's continued outperformance.

Regionally, the Algarve is reported to be leading the charge, with average prices there reaching €3,467 per square metre in 2025 — up 9.3% on the year before. In Lisbon, meanwhile, the capital's most exclusive addresses, among them Avenida da Liberdade, Lapa and Príncipe Real, are said to be achieving new-build prices as high as €12,000 per square metre.

Amanda Collison, spokesperson for Property Market-Index, points to a persistent supply shortfall as the primary force behind these rising valuations:

"New-build completions have averaged just around 21,000 homes per year between 2020 and 2024, compared with roughly 104,000 per year in the early 2000s. Yet demand has far outpaced this limited supply, with around ten properties sold for every new home built in 2024. That structural shortage is what continues to push prices upward, particularly in the country's most sought-after regions, and we expect this trend to persist through 2026 and 2027."

The report also points to a marked rise in international capital entering the Portuguese market. Total real estate investment volume is said to have grown by 51% in 2024 compared with the year before, with foreign investors reportedly responsible for 81% of that total.

To identify the country's standout locations, Property Market-Index assesses areas against eight weighted criteria, spanning regeneration investment, growth trends, land availability and infrastructure, with an index score above 100 denoting the strongest performers. Per the report, the top 5 hotspots for 2026-2027 are ranked as follows:

1. Quinta do Lago, Algarve – 194
2. Cascais, near Lisbon – 191
3. Vale do Lobo, Algarve – 189
4. Comporta, near Lisbon – 186
5. Ferragudo/Carvoeiro, Algarve – 183

The report's full rankings extend beyond this top five.

While the Algarve and Lisbon remain the established favourites, the report also flags rising interest in Alentejo's coastal enclaves — among them Comporta, Tróia and Melides — where capital growth is said to have reached as much as 18% in 2025. Northern Portugal, particularly around Porto and Braga, is also cited as an area of continued buyer interest.

Given that demand still appears to significantly outstrip new supply, Property Market-Index's forecast suggests prices across the country's top hotspots could rise by a further 5.8% during 2026, which — if it materialises — would mark Portugal's third consecutive year as one of Europe's strongest-performing property markets.

Steve Philp, director at Portugal Pathways, has observed a notable rise in international enquiries, particularly from the UK, US, South Africa, and Brazil.

"Access to the luxury segment can be challenging, as many premium properties are transacted off-market.

"Through our network of over 250 architects, developers, and industry professionals, Portugal Pathways provides access to exclusive off-plan and off-market opportunities that are not widely available."

The full Property Market-Index Hotspots Report 2026-2027 is available to view and download here.

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