House prices

The evolution of house prices in Portugal in the last three years


The quarterly figures of the median values of prices per square meter, reported in the last 3 years, of all housing transactions in:

– every municipality in the metropolitan areas of Lisbon and Oporto;

– every parish in the cities of Lisbon and Oporto;

– every council of the district capitals and the Regional Government headquarters of the Azores and Madeira;

[at the end of this text you will find a brief, simple and clear methodological note, explaining why the data shared in this article is the most universal and reliable on Portugal's house prices]

Sortelha (Sabugal), one of the Historic Villages of Portugal.

by PeekCC


Please note the caption on the right of the chart. You will find the corresponding match between each line of the chart (city) and each color.

That caption also provides the value that reflects the evolution of median values per square metre between the 1st quarter of 2016 and the 1st quarter of 2021, in Portugal and in each of the seven cities under analysis.


Graph 1 – Evolution of the median value per square meter (€/sq m) of residential property transactions, in the seven Portuguese cities with more than 100.000 inhabitants.

Source: Statistics Portugal.

When observing the chart, there are two obvious conclusions:

– That house prices in Portugal have grown quite significantly (more than 40% within 5 years);

– That house prices in Oporto and Lisbon have skyrocketed. This seems to have had a ripple effect on the neighboring municipalities of Vila Nova de Gaia and Amadora. In the latter case, house values increased 107% in five years. Yes, 107%.


What is less obvious but equally interesting is that this same variable, measured up to six months before (that is, until the 3rd quarter of 2020) indicated a growth of 80.0% in Lisbon and 85.3% in Oporto. In other words, in the space of half a year, values in Lisbon fell slightly (-2.3%), while in Oporto they continued to grow at an impressive pace (10.8%).

It is equally interesting to verify that the values in Oporto and Coimbra were practically the same until the 2nd quarter of 2017. And how less than four years later, the value per square meter in Oporto is 60.8% higher than in Coimbra. Oporto has been asserting itself, year after year, as an international brand and this has a very significant impact on the demand for housing.

Important note: INE (Statistics Portugal) has an incredible tool, which provides – for each of these seven cities – the median value per sq. m of residential property sales by parish, using squares of 500 meters on each side, and statistical subsections that often refer to no more than two or three blocks.


Aerial view of Cacilhas (Almada), Lisbon Metropolitan Area.

by Michele



Table 1 – Evolution of median value per sq. m. of residential property transactions by municipality in the Lisbon Metropolitan Area.

Source: Statistics Portugal.

Table 1 [the values in red represent price drops compared to the previous quarter and the ones in bold register peaks in that municipality during the period in question] shows that house prices in the Lisbon Metropolitan Area (LMA) have risen steadily since 2018. The municipalities of Almada, Moita, Seixal, Setúbal, Barreiro, and Sintra registered increases over 50% during this period, and the variation in house prices in Amadora was over 60%. It should be noted that, except for the municipality of Lisbon, all other municipalities registered historical records in the last quarter.

Church of Santa Engrácia, National Pantheon, Lisbon.

by anyaivanova



Table 2 – Evolution of median value per sq. m. of residential property transactions by parish in Lisbon city center.

Source: Statistics Portugal.

Table 2 [the values in red show the price drops compared to the previous quarter, the values in bold register the peaks in that parish during the period in question] shows something that is still a new reality: prices in Lisbon registered small drops in 2020.

Why do I mention 2020 when we already have data relative to 2021? Transaction values are registered by INE according to the transaction moment, which is made official on the date of the purchase and sale agreement, better known as a deed. What happens is the following: a large part of real estate transactions in Portugal are preceded by promissory agreements – usually signed 30/60/90 days before the final contract – where the transaction value is set and a down payment is made, normally around 10% to 20%. What does this mean? That the transaction values shown in the reports tend to reflect prices negotiated, closed, and downplayed in the previous quarter.

Note, for example, that the "redder quarters" of the period under review are the 3rd quarter of 2020 and the 1st quarter of 2021. Remember that the first lockdown took place in the 2nd quarter of 2020 and restrictions started to return during the last months of 2020 (maybe you don't remember, but it was only at the end of October that the use of masks in public spaces became mandatory in Portugal, and it was in early November that a curfew was decreed in the municipalities that were most affected, including Lisbon). Adopting this same logic and knowing now that the 1st quarter of 2021 brought a second total lockdown, it is possible that the 2nd quarter doesn’t show many parishes with new peaks.

On the other hand, it is important to state that in the 4th quarter of 2020 (which will have essentially reflected what happened in the 3rd quarter, that is, in the Summer of last year), in the midst of a pandemic context, a record was set for the number of transactions in a single quarter. This suggests that, when restrictions are drastically eased, the number of transactions may soar, and again put pressure on prices upwards.


It is worth remembering that the value of an asset is directly affected by the prevailing demand. When we are forced to stay at home (and remember that viewings in loco to real estate properties were forbidden between January 15th and March 15th) it is normal that there are fewer visits, fewer offers, and less business. In the case of Lisbon, it is common knowledge that market values grew significantly in line with foreign demand, which was drastically limited until recently when travel requirements – namely through the widespread use of the digital passport – started to become clearer. Still, using the most obvious example (Brazil has, by far, the largest foreign community residing in the national territory), it is still difficult for a Brazilian citizen to enter Portugal from his home country.

Area view over the city of Porto.

by trabantos



Table 3 – Evolution of median value per sq. m. of residential property transactions by municipality in the Oporto Metropolitan Area.

Source: Statistics Portugal.

I would like to start by saying that I am not familiar with the dynamics of the PMA (Oporto Metropolitan Area). But the truth is that I had the opportunity to observe, in loco, the changes that have taken place in the last ten years, in the center of that city. It is therefore easy to imagine that the consequences beyond the city limits (the search for alternatives to the center of Oporto, in its immediate surroundings, looking for housing solutions that are more balanced in relation to family income), are very similar to what we observed in Greater Lisbon. Besides, housing prices (and at least until the pandemic crisis, the impact that short-term rental had on historical centers), have been the subject of an extensive ideological and political debate in the two national metropolises.

When we look at Table 3 [the values in red represent decreases compared to the previous quarter, the values in bold are the maximum registered in that municipality throughout the period under analysis] we note something that we had already seen in the LMA: neighboring municipalities with good access to Oporto’s center (and I'm thinking of Matosinhos, Gondomar and Vila Nova de Gaia) show a price valuation per square meter of over 50% within 3 years. This is an obvious parallel with what we observe further south, in Odivelas, Amadora or Almada. It should also be highlighted that it was the municipality of Valongo that registered the greatest price increase per square meter (56.3%).

Largo dos Lóios, historic center of the city of Porto.

by rh2010



Table 4 – Evolution of median value per sq. m. of residential property transactions by parish in Oporto city centre.

Source: Statistics Portugal.

As already mentioned in the first chart, the evolution of transaction values in Lisbon and Oporto showed different behaviors in the last quarters. By observing Table 4 [the values in red represent price drops compared to the previous quarter, the values in bold the peaks registered in that parish throughout the period under analysis], we can conclude that cidade invicta (meaning: undefeated city, Portugal's second-biggest city nickname), unlike the capital, has continued to show increases in transaction values per square meter. The exceptions so far were, in the last quarter, two of the three “Uniões de Freguesia” (UF – Union of Parishes) where the values per square meter are higher: UF of Aldoar Foz do Douro and Nevogilde (which, as the name suggests, includes the famous Foz area), and UF of Lordelo and Massarelos (that hosts Bairro Gomes da Costa, Serralves, Campo Alegre, Bom Sucesso, Galicia, and most of the riverside between Foz and Miragaia).

As to the UF of Cedofeita, Santo Ildefonso, Sé, Miragaia, São Nicolau and Vitória (the other area that practices higher values, where the historic city center is located) has been consecutively showing increasing values since the 3rd quarter of 2019. I recognize that the urban rehabilitation of the historic center is largely responsible for this price pressure. According to Idealista portal (on 30th August 2021), 592 of a total of 1013 buildings for sale in the city of Oporto are located in that last UF. Moreover, it is estimated that residential pressure in Oporto has started to exert itself with at least a one-year delay in relation to Lisbon. This may justify the upward trend of prices that is still prevailing in the country's second city.


Finally, I would like to draw your attention to Campanhã and Bonfim, the parishes in Porto where the evolution of price / sq. m was more significant in the last three years (108% and 79% respectively). For those who know Oporto well, it is easy to predict that, as prices in the historic area skyrocketed, interest for the eastern neighbors (i.e., inland, in the opposite direction of the Douro River) would increase. After all... how many alleys, seen as decaying half a dozen years ago (and I'm thinking of some areas in the vicinity of Jardim de São Lázaro or Campo 24 de Agosto), are now the new “places to be”?

Mértola (Alentejo region): one of the municipalities, with the lowest population density across the country.



Table 5 – Evolution of median value per sq. m. of residential property transactions by municipality of the district capitals and the regional governments of Azores and Madeira capitals.

Source: Statistics Portugal.

The importance of demography

Demography is, at the same time, the factor with the greatest impact on the valuation of residential buildings, and the one about which less is said. The pandemic and fears about its effects on the economy almost always push the topic of home valuations to magnitudes of thousands or millions of euros. But the most elementary variables to understand the real estate market are the number of people who live in a given place and move across it.

2021 is the year of population censuses in Portugal, one more reason not to ignore such evidence. Do you know which are the ten most populous municipalities in the country? In descending order: Lisbon, Sintra, Vila Nova de Gaia, Oporto, Cascais, Loures, Braga, Almada, Matosinhos and Oeiras. Of these ten municipalities, only one (Braga) is not part of the metropolitan areas of Lisbon or Oporto or Lisbon.

Do you know which are the only NUTS (Nomenclature of Territorial Units for Statistics) regions that have experienced population growth in the last 10 years? Lisbon and the Algarve.

Now please look at the top of Table 5 [the red values represent drops compared to the previous quarter, the bold values the peaks registered in that district capital/ regional government headquarters throughout the entire period under review]. The match is obvious, don't you agree?


Lisbon and Oporto (as well as their respective metropolitan areas) continue to exert a magnetic effect over the rest of the country. And they are, together with the district of Faro (or if you prefer the Algarve region: both these designations refer to the same exact portion of territory), the areas where pressure on real estate prices has been most noted.


The impact of foreign demand

It is no secret that one of the reasons given for the skyrocketing of house values in the regions of Lisbon, Oporto, and the Algarve is the residential demand by foreign buyers. Whether or not you agree with the way in which they were carried out, the much-discussed restrictions on short-term rental, and on the use and location of properties purchased for eligibility of the famous golden visa, are the visible face of this awareness.

Do you know which is the second foreign community residing in Portugal? UK citizens. In 2020 there were more than 46,000. Practically three times more than in 2013. And are you aware of where the overwhelming majority (estimated by the Portuguese Chamber in UK) of the 60,000 homes of these Britons are concentrated? In the Algarve.


The provisional results of the Censuses released in the meantime are clear: the population residing in Portugal has decreased in the last ten years. But since 2017, the migratory balances (difference between immigrants and emigrants) have been positive, a very different scenario from the one witnessed in the period of Portugal's bailout. And it seems to be essentially in the coastal areas, namely in the LMA, PMA, and Algarve, that these people settle down.


Let's now focus on the end of the table. Is it a coincidence that Portalegre, the district capital with the lowest value/ sq. m in the entire country, is also, according to the 2021 Census, at the same time the district capital with the least population, and the one that lost more inhabitants in the last 10 years?

It is not.


Nowadays, the world knows that Portugal exists, where it is located, that it is safe (in fourth place worldwide, according to the Global Peace Index), and that it has many other good things to offer besides the climate and gastronomy. It knows that there are happy investors, and knows Portuguese citizens who stood out from the rest, and who highly contributed to the media coverage of this country (with Cristiano Ronaldo, hyper-highlighted, at the top of this list). The slogan “visit Portugal” often gave way to another expression: “moving to Portugal”. And this has a very significant impact on the three districts whose capitals are at the top of Table 5. And it seems that, little by little, there is a ripple effect to other regions. But for now: just for a few...



All data shared in this article was sourced from the House Price Statistics at the local level of the National Statistics Institute (INE), which immediately presents three methodological advantages over any report on housing prices in Portugal:


1) It refers to the actual transaction values and the Gross Private Area contained in the property's Tax Authority Property Description (thus ensuring consistent information on prices per square meter), information only possible thanks to the existing protocol with the Tax and Customs Authority (AT), which provides INE with access to information of a fiscal nature;


2) It includes all property transactions in Portugal whose use is "housing", with a private gross area exceeding 20 sq. m. Just to give you an idea, the General Regulation for Urban Buildings defines 35 sq. m as the minimum area to be considered for a new building, reconstruction, restoration or demolition, for a studio.

And properties whose private gross area is less than 600 sq. m. Excluding, in this way, dwellings with such peculiar characteristics that they could bias the value per square meter of a given area.


3) The results published for each quarter correspond to the information registered for the reference quarter and for the three previous quarters, which enables significant mitigation of any eventual seasonal effects on the behavior of sales. In the specific case of the pandemic context, it makes sense to consider those discrepancies between quarters in which the restrictions in force were significantly different might be even more pronounced and evident than what the figures published by INE might suggest.


About other reports or indexes on housing prices in Portugal

INE also publishes statistics on bank appraisals. But it is important to remember that:

a) A substantial part of the houses in Portugal are not purchased using financing;

b) Bank appraisals are largely obtained by analyzing the advertised values of houses that, almost always, don’t correspond to the prices practiced; traditionally, this tends to make the values of bank appraisals higher than the real prices.


Note that when we are dealing with a report carried out by a real estate portal, the results are based on the asking price (which, in most cases, does not correspond to the real transaction value). There is also no way to ensure that the areas displayed are correct. In fact, it often happens that we find the same property advertised in the very same portal, for different prices and different private areas.


On the other hand, if the report was carried out by a real estate brokerage brand, it may present real transaction values, but only for those cases in which it had direct intervention, which significantly limits the study’s scope.


There are also databases that have access to transaction values communicated to them by affiliated brokerage companies. But, in any case, they ignore all transactions carried out by individuals or brokerage companies with which they have no relationship.


Housing Price Statistics at the local level provided by INE are, in my opinion and for the reasons explained, those that offer a more thorough and representative picture of the entire universe of house prices in Portugal.

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