Real estate investment in Portugal records its strongest performance for 10 years

Portugal’s property market delivered its strongest performance in a decade during 2025, with total real estate investment reaching €2.8 billion, according to data reported by Idealista.

This represents a 22% increase compared with 2024 and underlines growing confidence in the country’s property sector.

Activity accelerated towards the end of the year, with the fourth quarter alone accounting for €895 million, providing a strong finish to an already robust year.

International investors continued to dominate the market, contributing roughly 60% of the total capital deployed, although domestic funds also returned more actively than in previous years.

Offices proved the most attractive asset class, accounting for 39% of total investment, followed by retail and hospitality, each with around 19%.

Yields remained largely stable across sectors, although some compression is expected in industrial, logistics and retail park assets.

The office sector experienced a notable rebound, particularly in the final quarter, when €356 million was invested.

This pushed the annual total to €666 million, representing a 159% increase compared with 2024. In Lisbon, 72,854 square metres of office space were occupied in the fourth quarter, bringing the annual total to 204,241 square metres.

Although this figure remains around 8% below the previous year’s level, the presence of new companies accounted for 30% of total take-up, suggesting continued interest from incoming businesses.

The capital’s development pipeline stands at approximately 370,000 square metres, with 125,000 square metres expected to be delivered in 2026, of which more than half is already pre-let.

Retail investment also rose by 6.4% over the year. The sector benefited from strong tourism flows and increased consumer spending, although limited supply restricted the entry of some international brands.

Domestic investors played a key role in the retail sector, accounting for roughly 60% of transactions. Shopping centres recorded a 10% increase in sales, while retail parks continued to attract investor interest, with five new projects under construction across the country.

Hospitality remained one of the most dynamic segments of the market. Hotel investment reached €540 million in 2025, up 15% from the previous year, with several landmark transactions completed in Porto and Comporta.

Supply growth was equally notable, with around 2,900 new rooms added during the year.

Tourism indicators remained positive, with 82 million overnight stays recorded, up 3% year-on-year, and, at 33 million guests, a 2% increase. The United States was the fastest-growing source market, with visitor numbers rising by 7%.

Meanwhile, the residential sector continued its upward trajectory, driven by persistent supply-demand imbalances. The national House Price Index rose by 4.1% quarter-on-quarter and 17.7% year-on-year.

Lisbon remained the main focus for owner-occupiers, with prime areas averaging around €5,200 per square metre, while projects priced up to €350,000 attracted particularly strong demand. In Porto, domestic buyers continued to support the market, with average prices edging up to around €3,700 per square metre.

Further south, the areas of Tróia, Comporta and Melides saw strengthening domestic demand over the past 12 to 18 months, with prices remaining broadly stable between €5,000 and €15,000 per square metre.

In the Algarve, demand was especially strong in the mid-range segment, with prices ranging from approximately €5,500 per square metre in Portimão to more than €13,000 per square metre in the Golden Triangle, reflecting continued interest in the region’s premium coastal locations.

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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 estate planning, wealth management, Golden Visa and tax optimisation, including post-NHR / IFICI tax regime planning, as well as private healthcare, money transfers and bespoke relocation and luxury real estate solutions to enhance life and investment 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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