Portugal's property market keeps growing as house prices fall globally

Real house prices worldwide fell by 1.2% at the start of the year, according to the Bank for International Settlements (BIS), an acceleration from the 0.5% drop recorded at the end of 2025.

Portugal's real house prices rose by 15.2% year on year, the largest increase among the 57 economies in the BIS study. North Macedonia followed at 12.5%, then Bulgaria at 10.8%. The eurozone as a whole grew by just 2.6% over the same period.

The BIS puts the rise down to a persistent imbalance between demand and supply. Portugal's government has introduced a housing tax package cutting VAT on construction to 6% and simplified planning permissions under a revised framework known as RJUE, though the BIS notes the impact will not be felt in the short term.

New research from Property Market-Index (PMI) sets out why Portugal's market keeps outperforming while others cool.

The report points to a structural shortage of new housing, with completions averaging only around 21,000 homes a year between 2020 and 2024, far below the roughly 104,000 a year built in the early 2000s.

According to PMI, total real estate investment volume in Portugal rose by 51% in 2024, with foreign investors accounting for 81% of that total, and Portugal attracted €13.2 billion in foreign direct investment that year, of which €3.5 billion went into real estate.

Luxury new-build property is one of the fastest-growing segments of this market. Property Market-Index's luxury-weighted national growth figure stood at 12% in 2025, but individual hotspots moved faster still. Tróia and Comporta led the way, each recording 18% growth in 2025 with a further 9% forecast by the end of 2026.

In Lisbon, new-build luxury prices in the Avenida da Liberdade area have reached up to €12,000 per square metre.

"Portugal's property market is defying the global trend because the fundamentals here are structurally different," said Amanda Collinson, spokesperson for Property Market-Index. "Demand from international buyers, particularly for luxury new homes, continues to outstrip a limited supply."

Property Market-Index forecasts growth across Portugal's leading hotspots will run at more than double the rate expected across the EU, UK and North America until at least 2027.

To find out how you can invest in Portugal's luxury new homes market and gain access to exclusive off-plan and off-market developments, arrange a free discovery call with Portugal Pathways.

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