House prices in Portugal over the last 8 years: the numbers and the story behind them

BEFORE THE NUMBERS, SOME CONTEXT

It is worth remembering that the strongest rise in house prices in Portugal began in what is commonly known as the “post-Troika” period, spreading initially from Lisbon’s historic center to the rest of the capital, and then to its metropolitan area. Almost at the same time, with a slight lag, a similar pattern emerged in Porto, spreading from the Baixa district to the rest of the city and neighboring municipalities.

Following the bailout request submitted by José Sócrates’s government, the Troika (the term commonly used to refer to the European Central Bank, the European Commission and the International Monetary Fund) was in Portugal from April 2011 to May 2014.

As this article covers the last eight years (Q1 2018–Q1 2026), a brief overview of the preceding years will help set the scene.



DEMAND

After the Troika’s departure (three years of austerity, recession, high unemployment, low confidence and scarce credit), Portuguese banks began injecting money back into the economy, at a time when interest rates were at historic lows and would fall even further. This stimulated demand in two ways: greater incentives to borrow and less attractive savings and investment options elsewhere — in other words, more occasional investors entering the property market.

On May 17, 2014, the day marking the Troika’s official departure from Portugal, the six-month Euribor rate was below 0.5%. In November 2015, it turned negative and remained so until June 2022: more than six and a half years with this benchmark rate below zero.
To appreciate just how exceptional such a situation is (and the bizarre scenarios it can produce), consider that at one point some banks were charging institutional clients and large depositors to hold their money. In other words, instead of being paid for the money they had deposited, these clients were the ones paying the bank.

A new tenancy law had come into force in 2012, bringing fresh momentum to the market. By the end of 2014, more than 2,000 Golden Visas had been issued, and more than 2,000 people had joined the Non-Habitual Resident tax regime. In other words, Portugal was finally on the investment map.

As if that were not enough, those years also saw the country emerge as a leading tourist destination. And — something I feel rarely receives enough attention — a man from Madeira was becoming one of the biggest figures in global popular culture.

Since 1998, the year Lisbon hosted EXPO 98 and José Saramago received the Nobel Prize in Literature, other figures, events and achievements in fields as diverse as politics and diplomacy, tourism and industry, sport, architecture and the visual arts have helped raise the country’s international profile.
This is not a vague notion: given football’s global reach, it is easy to see how hosting EURO 2004 and winning EURO 2016 raised Portugal’s international profile. The same can be said of the appointments of Durão Barroso as President of the European Commission in 2004 and António Guterres as UN Secretary-General in 2016, two of the positions that attract the most media attention in global politics and diplomacy.

But arguably no other individual or event has had an impact comparable to that of Cristiano Ronaldo, the most-followed person on both Facebook and Instagram worldwide.

Portugal's international visibility grew considerably.

To choose a country to visit, invest in, or live in, people first need to know it exists and have information about it. I cannot be the only Portuguese person who, 20 or 30 years ago, had to explain to someone from outside Europe that Portugal is a sovereign, independent country, or that its official language is not Spanish. I suspect that, in 2026, a conversation like this would be hard for almost any of us to imagine.

Cristiano Ronaldo (and a host of other figures and events that helped put Portugal in the spotlight) does (do) not explain the rise in house prices in Portugal. But it is hard to believe that the country's international profile – and with it, the foreign demand it attracted and the influence of that demand on the very shape of residential supply – would have evolved in the same way without him (them).



SUPPLY

Construction almost came to a standstill.

Between 2010 and 2014, almost 40,000 construction and real estate companies went bankrupt. Some of the surviving companies focused on emerging markets, while the last sectors banks wanted to lend to were precisely those accounting for almost half of all overdue corporate loans: according to the June 2017 edition of Banco de Portugal’s Financial Stability Report, construction and real estate activities accounted for around 48% of overdue loans to non-financial corporations in 2016.

Another telling detail: in 2015, during the first round of higher education admissions, not a single student was placed in any of 10 Civil Engineering degree programs.

Graph 1 clearly illustrates the contrasts in housing production in Portugal over recent decades.

It is tempting to say that 565% more homes were built in 2000 than in 2020. Or that 18 times as many homes were built in 2002 as in 2015.
Not least because both statements are true.

This staggering contrast has understandably received considerable attention and prominence recently.
But we should not compare these figures solely through the lens of today’s difficulties.

The current context encourages us to see the strength of housing construction in Portugal at the turn of the century as an extraordinary achievement. But it is worth remembering something often overlooked: those figures were underpinned by levels of financial leverage and lending standards that today’s regulations would likely not allow.

That financing model was part of the excessive borrowing that preceded the 2008 financial crisis. The crisis, its effects on the banking system, and the subsequent sovereign debt crisis contributed, in turn, to what was described a few paragraphs earlier: the destruction of a significant part of the sector.

In other words, it is fair to say that one of the reasons we build less than we need today is that, in the recent past, we built more than it would have been advisable to finance.

Even so, these figures do not capture all the homes coming onto the residential market each year. They do not include property rehabilitation, a segment of the sector that has played a significant role in Portugal over the past decade and a half: according to Statistics Portugal (INE), rehabilitation accounted for 22% of all completed construction works between 2018 and 2023, compared with 31% in the preceding five years.

LET'S GET TO KNOW THE PRICES OF THE LAST EIGHT YEARS

The following sections present median prices for each municipality in the Lisbon and Porto metropolitan areas and for each freguesia (civil parish) within the two largest Portuguese cities. You will find the median price per sq m of homes sold in each of the 33 quarters between Q1 2018 and Q1 2026.

These figures are presented in four tables, corresponding to the different sub-periods:
Q1 2018 – Q1 2020,
Q1 2020 – Q1 2022,
Q1 2022 – Q1 2024,
Q1 2024 – Q1 2026.

In the tables, figures in red represent falls relative to the previous quarter, while figures in bold mark the highest values recorded in each municipality or civil parish across the entire period under analysis (Q1 2018 – Q1 2026).

After each set of four tables, a chart shows how prices varied over these eight years in the municipalities or parishes concerned.
Once the municipalities of the Lisbon and Porto metropolitan areas and the parishes of each of these two cities have been examined in detail, I turn to the municipalities that are district capitals and seats of regional government, and to the "Top 20" most expensive municipalities in the country, presenting one chart with the median prices per sq m in the first quarter of 2026 and another with the evolution of this indicator since the first quarter of 2018.

MUNICIPALITIES IN THE LISBON METROPOLITAN AREA

Q1 2018 – Q1 2020

PRICE GROWTH ON THE CITY'S OUTSKIRTS

In the pre-pandemic period (Q1 2018 - Q1 2020), Lisbon still recorded very significant price growth: 29.1%. But Amadora led price growth in the Lisbon Metropolitan Area (LMA), with a 47.0% increase.

Its proximity to Lisbon and, very likely, the extension of the Metro's Blue Line into the heart of Amadora (Reboleira station had opened in 2016, and the effect of this improved access is naturally felt over the years that follow) made the municipality an even more practical alternative for those who could no longer afford Lisbon's prices but did not want to give up quick access to the capital's center.

According to Google Maps, the 12-stop journey from Reboleira to Marquês de Pombal takes just 20 minutes, with no need to change lines.

Q1 2020 – Q1 2022

WHERE DID PRICE GROWTH ACCELERATE DURING THE PANDEMIC?

Between Q1 2020 and Q1 2022, during Covid-19 restrictions and constraints, house price growth in the municipality of Lisbon slowed to 9.3% (versus 29.1% in the previous period), with quarterly falls recorded.

In fact, the slowdown in price growth is felt in 13 of the 18 municipalities of the LMA. In Amadora and Odivelas, increases were 20.5% and 18.9% (down from 47.0% and 33.4% in the previous period). I mention these two municipalities because they, together with Lisbon, are the three most densely populated areas in the entire metropolitan area.

When we look closely at the INE data, we realize that the five municipalities where price growth between Q1 2020 and Q1 2022 exceeded the growth of the two immediately preceding years (Alcochete, Palmela, Mafra, Vila Franca de Xira, and Sesimbra) are also five of the six least densely populated municipalities in the LMA.

In 2022, both Alcochete and Palmela had 154 inhabitants per km². In Sesimbra, Mafra, and Vila Franca de Xira, that same ratio was 279, 306, and 435 inhabitants per km², respectively.

To give a sense of scale, the population density in the municipalities of Lisbon, Amadora, and Odivelas stood, in the same year, at between 5,500 and 7,500 inhabitants per km².

What does this pattern suggest?

That, in this period, price growth accelerated in the less densely populated areas of the LMA. This is consistent with an idea repeated so often during the pandemic: more than ever, people were willing to trade centrality for space.



A note from the author

Much has been said about the resilience of house prices during the pandemic. But that analysis does not always take the following into account: it is hard to imagine that same resilience without government intervention and the banks' actions. Do you remember the moratoriums, the mortgage payment holidays that suspended loan installments for affected households? They played a key role not only in the finances of many families whose incomes had been affected by the sudden and unexpected collapse in economic activity, but also in easing fear and preserving economic confidence.

It is also worth remembering that the banks' conduct will not have been guided by goodwill alone. Preventing overdue credit from soaring was also in their own interest. And I believe that the experience of previous crises (the mortgage crisis and the sovereign debt crisis) left its mark on the very culture of lending institutions, preparing them to respond better to the challenges the pandemic brought.

Moratoriums and similar measures were widely adopted around the world, albeit with differences in scope and in the conditions under which they applied. And I cannot fail to note that, despite how common it is to hear objections to a certain national tradition of state interventionism, at that moment there were no significant criticisms of this initiative, from any point on the political spectrum.

Q1 2022 – Q1 2024

INTEREST RATES, THE CREST OF THE WAVE, AND THE NUMBERS THAT DON'T ADD UP

Over the period Q1 2022 – Q1 2024, house prices continued to appreciate. But they now faced constraints of a different kind.

The invasion of Ukraine on 24 February 2022 – beyond the psychological and media impact of a large-scale military conflict on the Old Continent, with consequences for the confidence of economic agents – sharply aggravated the inflationary surge already under way, leading the European Central Bank to raise interest rates abruptly. In June 2022, the 6-month Euribor climbed out of the negative territory it had occupied for more than six and a half years; by September 2023, it had passed 4%. It was the steepest rise in the history of this index.

When rates rise like this, in the case of a variable-rate loan (a type of mortgage with which Portugal has a strong tradition), the monthly payment on a loan for a house of the same value rises too. That is, on the same income, even if house prices were to stay constant, the house within your reach at the start of 2022 might no longer be a year later, without anything having changed significantly other than the price of money. For anyone buying with a mortgage, that price of money translates into the size of the monthly payment. What I am telling you is that, within a single year and according to the banks' own simulations, the maximum purchase price within reach of some buyers may, for example, have fallen from €400,000 to €300,000.

The effect on the market was immediate. In the LMA, the number of transactions fell from 50,218 in 2022 to 38,592 in 2023 – a drop of 23.2% in a single year, a contraction even more severe than the one recorded for the country as a whole (18.7%).

All this said, there appears to be an inverse relationship between the value of houses in a given municipality and their pace of appreciation.

That is, the lower the price of houses in a given location (the municipalities appearing in the lower part of the table), the greater the room for them to rise appears to be. This is consistent with the idea that the wave of house price appreciation in Portugal formed in central Lisbon (and then Porto) and spread outward to their respective peripheries.

The figures recorded in Cascais may, for that reason, be seen as a particular surprise. Together with Lisbon, this municipality forms the most expensive pair in the country, by a considerable distance from those that follow. And yet it appreciates 25.9% in this biennium: a pace closer to that of the more affordable municipalities of the LMA, and well above the 15.0% of Lisbon or the 17.5% of Oeiras, the third most expensive municipality in that metropolitan area.

Adding what had already come before, Cascais reaches Q1 2024 with appreciation of 100.1% relative to Q1 2018. In six years, the median price per sq m had doubled: from €2,004 to €4,010.

On the other hand, and given so pronounced a cooling of effective demand – reflected in the fall in the number of transactions – it is legitimate to find such significant appreciation puzzling. Alcochete – whose timid appreciation (5.2%) can perhaps be understood in the light of its brutal appreciation in the previous biennium (47.0%) – is the exception. Odivelas, Lisbon and Oeiras appreciated 14.9%, 15.0% and 17.5% respectively, and all the remaining 14 municipalities appreciated above (or well above) 20%.

Such striking appreciation over this biennium is hard to make sense of when, between 2022 and 2023, the region recorded a drop of almost a quarter in sales. No data are available to dismiss out of hand the hypothesis that a generalized and significant rise in house prices did occur in the LMA in this context, but accepting it seems imprudent. In my view – shared by others who study the market, such as Afonso Silva and Joaquim Montezuma – we are, predictably, before one of those cases in which the median reflects not only the evolution of prices but also a change in the composition of the houses being transacted.

That is, in a market with significantly fewer sales, it may be enough for the relative weight of transactions in segments with higher prices per sq m to increase – especially if buyers in those segments are less dependent on bank credit and therefore less exposed to the rise in interest rates (a fairly plausible hypothesis in that context) – for the median to rise without there necessarily being a generalized rise in prices. Or, at least, without that generalized rise being as pronounced as the variation in median values suggests.

For these reasons, I take the view that we cannot assert that, in this period and this region, house prices appreciated to the extent suggested by the INE indicator.

Q1 2024 – Q1 2026

THE COST OF MONEY FALLS AGAIN, AND PRICES SHOOT UP ONCE MORE

If the previous biennium marked a cooling (as shown by a fall in the number of transactions), this latest period saw renewed pressure on prices. From mid-2024, as inflation moved downward, the European Central Bank began a cycle of interest-rate cuts. The 6-month Euribor, which had passed 4% in 2023, fell to around 2% by the end of 2025. With money becoming more affordable again, some of the lost credit-financed purchasing power returned. And since many households assess whether they can buy a given house largely by the corresponding monthly payment, this fall may also change their perception of their own purchasing capacity.

This fall in the cost of money was paired with two significant demand-side stimuli aimed at younger buyers. From August 2024, buyers up to the age of 35 became eligible, subject to certain conditions, for an exemption from Property Transfer Tax (IMT) and Stamp Duty on the purchase of their first permanent own home: at the time (the thresholds are updated annually), the exemption was full for properties up to €316,772 and partial for purchases between that figure and €633,453. The State's public guarantee, in force since the start of 2025 and applicable to properties up to €450,000, allowed eligible young buyers to obtain financing of up to 100% of the transaction value.

According to the Bank of Portugal, in 2025, 18.8% of new home loans for the purchase of a permanent own home – corresponding to 21.3% of the amount lent – benefited from the State guarantee. The scheme applies to contracts signed up to 31 December 2026, and its effects have been questioned, notably by the Bank of Portugal and the International Monetary Fund. That said, the Government has remained faithful to the mantra that rising house prices should be addressed by increasing supply, not restricting demand.

The impact on market dynamics was immediate and measurable. In the LMA, the number of transactions rose from 38,592 in 2023 to 45,106 in 2024 and 48,250 in 2025. Nationally, 2025 closed with the highest number of homes sold since the INE began recording these data: 169,812 transactions, above the previous peak recorded in 2022. Curiously, the same did not happen in the LMA, which remained around 6% below its own 2019 record – a sign that the recovery was more intense outside this region.

In 13 of the 18 municipalities of the LMA, this was the biennium of greatest appreciation in the entire period under review. The exceptions fall into two groups: the municipalities that had reached their fastest pace of appreciation before the pandemic (namely Lisbon, Cascais and Amadora), and the two with the lowest population density, Alcochete and Palmela, whose values had shot up during the period when the Covid-19 restrictions were most keenly felt.

The extreme cases are, once again, on the south bank. Barreiro appreciated 56.8% in just two years and Moita 54.3%: rises greater than any other variation recorded in the LMA in the earlier periods. Behind them, and still above 40%, come Vila Franca de Xira, Sintra and Setúbal.

Alcochete, which had all but stagnated in the previous biennium (5.2%), now appreciates 38.5%. It is tempting to attribute this rise to the Government's announcement, on 14 May 2024, of the decision to build the new Luís de Camões Airport on the Air Force's firing range. The thing is, the site chosen for the new airport does not lie in the municipality of Alcochete. The firing range – created in 1904 and known for decades as the "Campo de Tiro de Alcochete" by virtue of its proximity to that town – is divided between the municipalities of Benavente and Montijo, without a single hectare in the municipality of Alcochete. That an informal designation continues to be taken as a valid geographic indication – which it is not – says, perhaps, more about how perceptions are built in the market than any table could. And if popular lore, the press and even the Government helped to cement the association between Alcochete and an airport that will have no address in that municipality, it may be Alcochete itself that draws the greatest benefit from the association.
I underline this episode to illustrate how, so often, perception (and not the facts) most influences the market, or the opinions formed about it.

On the other hand, Cascais appreciates 16.9%, the lowest figure in the entire LMA, and Lisbon 21.3%, the second lowest. This means the two most expensive municipalities in the country are now the ones that have appreciated the least. This reinforces the idea that the crest of the wave tends to move away from the more central or more expensive areas. Indeed, the two municipalities that recorded gains above 50% in the space of two years – Barreiro and Moita – are precisely those where house prices are lowest in the LMA. And, for that very reason, those where the ceilings of the tax exemption and the public guarantee cover a much larger share of the market – unlike Cascais and Lisbon, where the price of a significant portion of properties places buyers beyond the reach of these measures.

The use of the public guarantee also differs markedly by region. This contrast is visible in the Bank of Portugal's data: in 2025, in the Alentejo, Beira Baixa, Lezíria do Tejo, Terras de Trás-os-Montes and Beiras e Serra da Estrela, more than half of the home-purchase loans for a permanent own home taken out by young buyers drew on the State guarantee; in Greater Lisbon, that proportion was around a third.

Q1 2018 – Q1 2026

EIGHT YEARS ON: PRICES HAVE DOUBLED AND TRIPLED ACROSS ALMOST THE ENTIRE LMA

With the period under review now closed, the eight-year picture is as follows: between Q1 2018 and Q1 2026, the median price per sq m more than doubled in 17 of the LMA's 18 municipalities.

Lisbon was the only municipality where the price per sq m did not quite double. And by very little: 96.9%, a mere 3.1 percentage points short of an outright doubling. The municipality where the most striking appreciation of the housing stock began, and which for years pulled the whole region along, is today the one where prices rose the least over eight years. Bearing in mind that "rose the least" here means they almost doubled.

At the opposite extreme is Moita, where values almost quadrupled: 284.3%, from €617/sq m in 2018 to €2,371/sq m in 2026. Next comes Barreiro, at 272.1%. And just behind them, all above 200%, are Sintra, Setúbal and Seixal. To be clear, a rise of 200% means a tripling of prices.

In 2018, the median price per sq m in Lisbon was 4.2 times that of Moita. In 2026, the same ratio is just 2.1 times. That is, the relationship between the two values has halved. Not because Lisbon has become cheaper (recall that its sale prices practically doubled), but because prices on the periphery are drawing ever closer – in relative terms, at least – to those charged in the capital.

At this point, it is worth stepping away for a moment from the percentages and the successive records of appreciation – and looking at what these metrics mean for someone searching for a home.

Over eight years, prices in the Lisbon Metropolitan Area doubled, tripled and, in some cases, almost quadrupled. Household incomes did not come close to keeping pace. At the national level, this gap is equally clear. According to the Bank of Portugal's March 2026 Economic Bulletin, from 2019 (through 2025) the house price index rose by around 80%, while the median income of Portuguese households grew by only around 34% between the start of 2019 and the third quarter of 2025.

This divergence is particularly striking in Lisbon: according to the same document, in 2023 the monthly payment to buy a median-area home came to €1,811, corresponding, in theory, to 102% of median household income. In other words, we are not even talking about an excessively heavy payment, but about one that exceeds the household's entire income.

LISBON CITY PARISHES

Q1 2018 – Q1 2020

ONE CITY, MANY REALITIES

First, I would like to emphasize what these tables reveal most clearly: we should be cautious about treating Lisbon as a uniform market. Its 24 parishes and 100 sq. encompass a diverse territory, with very different local dynamics.

Even so, from the beginning of 2018 to the beginning of 2020, house prices grew substantially across Lisbon.

The figures shown in red in Table 2.1 — indicating declines from the immediately preceding quarter — are clearly in the minority. Carnide was the only parish where price growth over these two years was below 20%, while 14 of the 24 parishes recorded increases of more than 30%.

As for prices in Marvila almost doubling in just two years, I refer readers to this article from June 2022, which explains in detail “what Marvila has to offer that nowhere else in Lisbon can match".

Q1 2020 – Q1 2022

THE PANDEMIC, MOBILITY, RENTALS, AND LOCAL ACCOMMODATION

Table 2.2 shows that, broadly speaking, the pandemic period significantly slowed the pace of price increases in the capital. Between Q1 2020 and Q1 2022, most parishes still show a positive change, but at a rate far below what was seen in the previous two years. And the figures marked in red, corresponding to declines relative to the immediately preceding period, now become much more frequent.

Part of this shift in price behavior can be explained by the general restrictions in place during this period. If limits on a population's mobility affect daily life in general and economic activity in particular, this is even more evident in real estate. These limits were felt even more strongly by those who did not reside in Portugal.

It is worth remembering that, contrary to what is often suggested, foreign demand for housing does not occur solely through property purchases. If that demand affects the rental market and the rents certain properties can generate, it will also be reflected in their market value. Particularly for investment properties, expected return is, naturally, one of the variables that determines how much someone will be willing to pay.
And the pandemic also directly hit the rental market.

You may no longer remember, but during that period, extraordinary measures were introduced that significantly restricted the ability to terminate tenancy agreements. These measures protected tenants who, under certain conditions, could no longer pay their rent (or could only pay it later). And regardless of whether one agrees or disagrees with those measures (we should remember that the circumstances were probably the most unusual of our lifetimes), the fact remains that landlords were temporarily more exposed to the risk of tenants failing to pay their rent.

INE own data on new contracts help explain the market's shift: in Q1 2021, Lisbon and Porto recorded year-on-year declines in rent values.
But those figures cannot tell the whole story. They do not capture, for instance, landlords who agreed to temporarily reduce the rent on existing contracts, nor situations in which part of the rent stopped being paid or was deferred. We should keep this context in mind when we look at Table 2.2 and see the figures in red, which mark price declines relative to the previous quarters.

The other piece of evidence is that prices in the parishes of Santa Maria Maior and Misericórdia fell during the pandemic period (and that in some other parishes the increases were marginal). And here, too, there is a twofold effect. These two parishes include some of the city's most touristy areas. For that reason, it is only natural that the short- and medium-term rentals that proliferated there (and continue to proliferate) declined in number and in value, penalizing the expected income those properties might generate.

At the time, what Idealista (the largest property portal in Portugal) had no shortage of were apartments in central areas of the city, advertised at attractive rents, for periods shorter than a year, in the hope that, the following summer, the course of the pandemic would allow the high returns associated with shorter stays to be recovered.

In addition, these two parishes include neighborhoods where restrictions on Local Accommodation (Alojamento Local, or AL — Portugal's short-term lodging regime) were imposed from the outset: the so-called "containment zones."

What happened in these zones?

1) New AL (short-term rental) registrations were no longer permitted in the areas covered by the restrictions.
2) Under the regime then in force, AL registrations were non-transferable for houses and apartments in containment areas. As such, anyone buying a property in one of these zones could not continue the previous activity and replicate its profitability, so the property's market value was no longer inflated by that expectation or by buyers seeking it strictly for that purpose.


The first two containment zones were established in November 2018 and affected both parishes. A year later, these restrictions were expanded and left virtually the entire parish of Santa Maria Maior barred from new AL license registrations. That said, according to a December 2022 report by the Lisbon City Council (CML), which cross-references AL data with the most recent 2021 Census, the ratios of properties dedicated to AL relative to "Conventional Family Dwellings" in Santa Maria Maior and Misericórdia were 71.3% and 47.3%, respectively.

In other words, for every 10 Conventional Family Dwellings in Santa Maria Maior, there were more than 7 AL registrations. And in Misericórdia, nearly 5.

These ratios show the enormous presence of AL in those two parishes. For properties whose sale entailed a change in operator and the consequent lapse of the registration, a significant component of the income-generating potential would be lost, because the new owner could not replicate the previous business model. All else being equal, that limitation would reduce the value that some potential buyers would be willing to pay.

Q1 2022 – Q1 2024

AFTER THE PANDEMIC

Looking at housing prices between Q1 2022 and Q1 2024, it becomes clear that although almost every parish recorded occasional price declines, Lisbon appears to have regained some of the momentum in price growth lost during the pandemic. Unlike the previous two-year period, none of the 24 parishes ended this period below the value recorded at the start, and the figures showed no sign of the price stabilization that so many prospective buyers had been longing for.

In other words, the most detailed statistics available on housing prices suggested that homes in Lisbon were continuing to appreciate, in most cases above inflation (which reached higher levels during this period, which is why the European Central Bank and other central banks around the world raised interest rates). This means that, even in an inflationary context, the INE figures pointed to a real increase in housing prices.

But there is another relevant theme. The pandemic and its restrictions constrained the movement of people and goods and, all the more so, activity in the real estate market. But one response the pandemic accelerated and normalized – remote work – had precisely the opposite effect.

It became possible, for a far wider range of people, to keep earning income from employment based in Stockholm, London, New York, or San Francisco while living in Lisbon and enjoying its quality of life and cost of living. And there are signs that this transformation was not merely a passing phase: over the last five years, at least seven new international schools have opened in the LMA: three in Lisbon and one each in the municipalities of Almada, Sintra, Oeiras, and Cascais.

This does not, in itself, prove a causal relationship with the movement in prices, but it helps us understand how international demand for long-term housing (whether through purchase or rental) may have taken firmer hold after the pandemic.

As a real estate agent who regularly works in Lisbon, I can say it has become common to market homes for sale and for rent, where the overwhelming majority of those interested are foreign nationals. It would be wrong even to suggest that there is a single “foreign client” profile, but it seems clear that a growing number of people “live in Lisbon but work abroad (or for employers and clients abroad)”.
And there is no shortage of fellow real estate agents in Lisbon who paint a very similar picture.


Graph 3 shows another particularly telling figure. According to data from the Tax and Customs Authority (AT) compiled by the Court of Auditors, in 2023 alone the number of people enrolled in the Non-Habitual Resident tax regime rose by 40,387 (even if only a portion of these people had school-age children, it is easy to imagine an increase in demand for schools with an international curriculum in some parts of the country). Eligibility for this regime required that these people had established residence in Portugal. In other words, they necessarily needed a housing solution. Many bought; others rented.

I would recall two things:

1. On 4 December 2023, of the 1,018 listings for two-bedroom (T2) apartments to rent in Lisbon published on Idealista, 522 (51%) had rents of €2,000 or more (I recorded these figures in a piece dated 6 December that year on demand);
2. Ultimately, the market value of any given home corresponds to a multiple of the rent that same home can generate in the rental market.

It is hard to conceive that the number of new beneficiaries registered under the Non-Habitual Resident regime in 2023 (which would go on to be repealed, in the form then in force, on 1 January 2024) did not affect the residential context of the capital. Not least because this figure counts individually enrolled beneficiaries, not the full number of people in their respective households.

That said, without knowing what share of these individuals and their families settled in the capital, we cannot quantify that impact. But faced with a figure of this magnitude and Lisbon's evident appeal and prominence within the Portuguese context, it would be difficult, even on a conservative reading, to ignore the contribution of such a significant body of newcomers to the evolution of the capital's residential market over these two years.
 

Q1 2024 – Q1 2026

THE SLOWDOWN THAT NEVER CAME

To give a sense of scale, over the interval between Q1 2018 and Q1 2024, the city of Lisbon as a whole appreciated by 62.3%.

And to be entirely clear, what this figure tells us is that the median price per sq. m in Q1 2024 (€4,188/sq. m) was more than 60% higher than the same indicator in Q1 2018 (€2,581/sq. m).

This is a fairly striking evolution in prices. All the more so when we consider that, during this period, the world lived through the largest pandemic in 100 years and saw the steepest rise in Euribor since its creation.

If we look at the statements of professionals in the sector and at the forecasts of major supranational institutions for Portugal during 2024 and 2025, we will almost always find two ideas. The first, that prices would continue to rise. The second, that the pace of that rise would tend to slow.

In Lisbon, at least in theory, it would have been even more reasonable to expect such a slowdown. After all, this was where this cycle of strong appreciation first began to show itself most clearly. And Lisbon remains the most expensive municipality in the country (I will explain later why this claim holds beyond what the INE figures themselves show).

The truth is that this slowdown never came. On the contrary: across the city as a whole, the pace of appreciation strengthened very significantly over the last two years.

We already know that the fall in Euribor to levels well below its 2023 peaks, and the tax exemption granted to young people on the purchase of their first own and permanent home — even if only a small share of homes in Lisbon are transacted at values eligible for a full IMT (property transfer tax) exemption — served to strengthen demand.

But, in the final analysis, I would venture to say that this two-year period exceeded the outlooks put forward by the people to whom the mainstream media tend to give a voice on these matters, including those of the people who represent organisations whose financial interests are served by generous expectations of market appreciation.


Four additional notes


1) Marvila

As I have noted before, it remains a statistical anomaly that warrants a reading of its own. The decline now recorded may be explained by a reduction in the relative weight of new construction in transactions — whether because fewer new properties were sold, or because the number of transactions of existing homes increased, or a combination of the two.

This detail is particularly relevant given the scale of the impact that new construction has in Marvila, especially near the Tagus, where it was responsible for introducing market segments that, ten years ago, most people would have considered inconceivable in that geography (one that a good many Lisboners would struggle to place on a map).

It was precisely this effect that I explained in an analysis published some years ago. When the number of transactions in a given parish is relatively low, the arrival of new product at prices well above those of the existing housing stock can profoundly alter the median, without this meaning that the homes already there had, across the board, undergone an almost immediate appreciation, as a decontextualised reading of the INE statistics might suggest (and Graph 5 helps convey the scale of this effect).

As the built environment and the social fabric of the parish are transformed, that appreciation gradually extends to the rest of the housing stock. And, indeed, that area has changed.


2) Santa Maria Maior

The negative change in this parish follows an entirely different logic.

I have already referred to the impact that the changes to the Local Accommodation rules had on the city's historic areas, where for several years a significant part of real estate demand was tied to the possibility of operating properties for tourism and, for that reason, rested on income rationales that could justify purchases at prices that would hardly be reached on a strictly residential basis.

But there is probably another transformation to take into account. In an early phase of this cycle of real estate appreciation, an important part of foreign demand for Lisbon naturally concentrated in the historic centre, where it found precisely some of the city's most recognisable images.

As Lisbon consolidated its position as the primary place of residence for many foreigners, or as some of those already here began to look at other attributes of the city beyond the charm of its historic areas, more practical considerations gained weight: schools, gardens, parking, more recent buildings, accessibility, and other features that significantly widen the range of geographies in play.

In this way, the pressure on prices exerted by segments of foreign demand with greater purchasing power than most domestic demand will have ceased to concentrate solely in the historic centre.

This does not mean that the negative change of 3.8% in Santa Maria Maior over this period should be attributed to one or two single causes. But this trend helps us understand why one of the parishes that was at the centre of the first phase of Lisbon's appreciation may today behave differently from the rest of the city.


3) Cascais (right behind Lisbon)

The median price per sq m in Cascais is the only one, out of 308 municipalities across the country, comparable to that of Lisbon. But even if, at some point, that municipality matches or overtakes the capital, this will not mean — as we may naturally feel compelled to conclude — that the price of land is higher in Cascais.

Consider the following. In calculating the price per square metre (€/sq m), the INE uses the gross private area of each property. Under identical conditions of location, build quality and finishes, state of repair, and gross private area, a house should have a higher market value than an apartment.

This is because the value associated with a garden, a plot of land, a swimming pool — or, in the case of an apartment, a terrace or parking spaces — ends up, one way or another, being incorporated into the property's price, without necessarily changing the gross private area, which is the denominator in the "price per sq. m" ratio.

When the INE cross-references the administrative data from the Tax Authority, it necessarily has to turn that information into a standardised, comparable, and easily understood indicator. That indicator does not capture whether a house sits on a 2,000 sq. m plot, whether half of that land is taken up by a beautiful garden, or whether, in the case of an apartment, there is a generously sized terrace offering a panoramic view and privacy.

These particularities — which can have a very significant impact on determining the market price of a given home — do not change the denominator used in the price-per-square-metre ratio: the gross private area. And this is entirely understandable. The INE's aim is not to appraise each property individually, but to build a comparable statistical indicator.

What would not be acceptable would be for me to analyse these figures without bearing in mind the stark difference in the density and typology of the built environment between the municipalities of Lisbon and Cascais.

There is one particularly telling indicator...
At the time of writing these very lines, more than half of the residential properties listed for sale on Idealista in the municipality of Cascais are houses. In the municipality of Lisbon, that figure is 6%. But one piece of data may surprise you even more: in the municipality of Cascais, 12% of all Idealista residential listings are houses with an asking price of €3,000,000 or more. That indicator stands at just 1.5% in Lisbon.

This difference may not explain everything. But it does explain why two seemingly similar median price/sq m figures may not mean the same thing.


4) What the INE hasn't been publicizing

The House Price Index report for the fourth quarter of 2024, released on March 21, 2025, included the additional data that had been reported regularly since the report of March 23, 2022.

That is, it tells us that individuals bought 86.1% of the homes sold in Portugal in 2024, and that the remaining 13.9% were purchased by legal entities (non-financial corporations, financial corporations, general government, or non-profit institutions serving households). It also tells us that 93.7% of the homes sold in Portugal in 2024 were bought by people with a tax residence in Portugal, and that the remaining 6.3% were purchased by people with a tax residence in other countries.

As it happens, this report also provided, for the first time, "additional data on the universe of housing transactions whose buyer belongs to the Households institutional sector": namely, the place of birth of the people who bought homes.

The upshot: in 2024, of the 134,540 homes sold to individuals, 71.3% (95,988) were bought by people born in Portugal. Which means that, that same year, 28.7% (38,552) of those homes were sold to people born abroad. 28.7% (or 24.7%, if we adjust the base to also include purchases made by companies, which obviously have no place of birth). A figure incomparably higher than the 6.3% counted by tax residence.

I can't recall a single news outlet addressing this gap, or even giving any sign of being aware of it. Only a handful of analysts (in this case a real estate broker and an academic), like the aforementioned Afonso Silva and Joaquim Montezuma, seem to have noticed it.

I believe Graph 4, first published in Anatomy of a Lie, makes it visually clear how much the measure of foreign demand changes depending on which indicator you use. So the next time you see journalists and pundits framing or describing foreign demand in Portugal as something marginal, you'll know what else to take into account. And now I invite readers to imagine just how striking a chart of this kind would look if applied to the Algarve region alone, or to the municipalities of Lisbon or Cascais.


Additional note
INE replied to me by email as follows: “The ‘nationality’ variable is not available in the information provided by AT”.*
This means that, strictly speaking, this information cannot be used to directly quantify residential property purchases by non-Portuguese nationals.
In my view, it is difficult to understand why the public institution whose mission is to “produce and disseminate, effectively, efficiently and impartially, high-quality official statistical information that is relevant to society as a whole” does not accompany the data it publishes with an explicit clarification of this limitation.
Its staff can hardly be unaware of how these figures are presented: one only has to read the coverage of each new quarterly INE report. Most of the media (I would venture to say “all the media,” but I do not want to make the same mistakes I am criticizing others for) take the liberty of presenting the published data on buyers’ tax residence as a measure of purchases by foreign nationals.

* Autoridade Tributária e Aduaneira: the Portuguese national authority responsible for tax and customs administration.

Q1 2018 – Q1 2026

EIGHT YEARS, (ALMOST) 24 LISBONS

First, there is a caveat when reading this graph. The scale of the appreciation recorded in Marvila, whose nature I have already explained, visually compresses the results of the remaining parishes.

By stretching the scale to nearly 250%, this appreciation makes increases that, in any other context, would be read as fairly striking appear relatively modest.

As shown, 14 of the 24 parishes recorded appreciation of between 90% and 130% over this period. In other words, in almost 60% of the parishes, the median price came close to doubling or even more than doubled in just eight years.

This appreciation did not happen uniformly. The 24 parishes shared the same macroeconomic backdrop but responded differently to factors such as new construction, foreign demand, tourism, remote work, the cost of credit, or changes to Local Accommodation. And within many of these parishes, there is still enormous heterogeneity.

For example, the parish of Arroios takes in much of Praça Duque de Saldanha and Avenida Almirante Reis, Largo Dona Estefânia, Rua do Forno do Tijolo, and part of Alameda Dom Afonso Henriques. Each of these place names evokes, for most Lisboners, very different urban settings. And yet, for a statistical reading of house values, they are all aggregated into a single unit: the parish.

That said, I will share a tool from the INE: GeoHab. It is an interactive mapping platform that lets you observe actual housing transaction prices at a geographic scale much finer than the parish. The data can be viewed in grid squares of just 500 by 500 meters, or by statistical section, which in some cases corresponds to one or two blocks, making visible the contrasts within a single parish, the smallest administrative division of Portuguese territory.

Currently, the platform is available for seven cities with more than 100,000 inhabitants: Amadora, Braga, Coimbra, Funchal, Lisbon, Porto, and Vila Nova de Gaia.

MUNICIPALITIES IN THE PORTO METROPOLITAN AREA

Q1 2018 – Q1 2020

PORTO AND MATOSINHOS WERE STILL SETTING THE PACE

Do you remember what was written earlier? That the most striking appreciation of homes in Portugal was felt first from the historic centre of Lisbon to the rest of the capital and then to its metropolitan area?
And that, with only a slight lag, a similar movement was seen from Porto's Baixa to the rest of the city and to the neighbouring municipalities?
That is precisely what stands out when we compare the results obtained, between Q1 2018 and Q1 2020, in Lisbon and Porto and in their respective metropolitan areas.

In this period, appreciation was already beginning to shift from Lisbon to its periphery.
To the north, however, the geographic concentration of appreciation was still very evident: Porto appreciated by 35.8%, and the four municipalities directly bordering it recorded increases of 30% or more: Matosinhos (36.9%), Gondomar (33.8%), Vila Nova de Gaia (31.7%), and Maia (30.0%).

Outside this core, Valongo is the exception. As we move away from Porto and the municipalities directly bordering it, the pace of appreciation was, as a rule, significantly lower.

Q1 2020 – Q1 2022

THE PANDEMIC AND THE APPRECIATION OF WHAT LIES BEYOND THE CITY LIMITS

One of the things that stands out most in this stretch of time is the fact that appreciation in Porto and Matosinhos, the two most expensive municipalities in this metropolitan area, fell by more than 10 percentage points relative to the previous two years (from 35.8% and 36.9%, respectively, to 24.5%). As the two most densely populated municipalities in the region, they would predictably also be among the most vulnerable to a pandemic's impact on the residential market.

Arouca, by contrast, appreciated by 33.6% – this being the only of the four two-year periods in which its appreciation reached double digits – making this period an exception.

Arouca is, by far, the least densely populated municipality in the entire metropolitan area. According to Pordata, in 2023 it had an estimated population density of just 64 inhabitants per km². If you visit the municipal seat, you will find a small town built in a valley, surrounded by mountains. It is in its immediate surroundings that the Passadiços do Paiva (the Paiva Walkways) are located. In short: it is a predominantly rural area that contrasts with the idea of a metropolis.

For this reason, although less obviously than in the Lisbon Metropolitan Area (LMA), there were also, further north, people willing to trade centrality for space.

In this period, the wave of residential real estate appreciation in the Porto Metropolitan Area (PMA) seems, at last, to begin spreading from the center to the periphery.

Q1 2022 – Q1 2024

THE CREST OF THE WAVE REMAINS CLOSE TO PORTO

The average appreciation across the 17 municipalities of the PMA was practically unchanged from the previous two-year period. What changed was its geography. Arouca, one of the standout cases during the pandemic, drops from an appreciation of 33.6% to just 7.2%.

In the opposite direction, Matosinhos and Vila Nova de Gaia — the two most populous municipalities bordering Porto, and those that most naturally extend the city to the north and to the south — accelerate very significantly: Matosinhos goes from 24.5% to 36.8%, and Gaia from 27.0% to 35.8%.

This is a particularly interesting behaviour when compared with Lisbon. While a slowdown was already being felt in the more central and expensive markets of the LMA, Porto's two main urban continuations kept gaining ground. This suggests that, in the north, the wave was still at a less advanced stage. The crest of the appreciation remained very close to Porto, felt above all in its immediate urban extensions, while in Lisbon it already seemed to have moved out to the periphery.

Q1 2024 – Q1 2026

THE CREST OF THE WAVE FINALLY MOVES AWAY FROM PORTO

Between Q1 2024 and Q1 2026, price acceleration in the Porto Metropolitan Area is particularly striking. In 11 of the 17 municipalities, this is the two-year period with the greatest appreciation in the entire period under analysis. Even more illustrative is that, in 12 of the 17 municipalities, appreciation exceeds 30%, and in 7 it even surpasses 40%.

But it is perhaps even more interesting to see where that acceleration stops happening.

In the previous two-year period, Matosinhos and Vila Nova de Gaia had appreciated by 36.8% and 35.8%, respectively. I wrote then that the crest of the appreciation still remained very close to Porto, felt above all in its main urban extensions. Two years on, that picture appears to have changed. In Matosinhos, appreciation fell to 18.1%. In Porto, it went from 26.1% to 19.3%. Vila Nova de Gaia recorded only a slight slowdown.

Porto and Matosinhos, the two most expensive municipalities in the PMA, are now among the four municipalities in the region where prices rose the least.
So where is the crest of the wave?

São João da Madeira appreciated by an extraordinary 65.4% in just two years (almost what Arouca appreciated over eight years). I don't know the PMA market well enough to assess, as I did with Marvila, how much that figure actually reflects the appreciation of homes in general. It is a figure that, objectively — however extraordinary it may sound coming from someone like me, who works in the real estate sector — will be above all frightening for anyone looking to buy a home.

In any case, the municipality of São João da Madeira is only 8 km²: it is the smallest municipality by area in Portugal. In fact, it is barely larger than the parish of Marvila. In such a compact municipality, I would not rule out that a cluster of new developments, especially if aimed at distinct market segments, may have significantly influenced the mix of homes transacted and contributed to the change in the median observed. But I do not have enough information to demonstrate it.

São João da Madeira does not, however, explain the pattern on its own. Except for Espinho (another small municipality, around 21 km², with an appreciation of 51.7%), several municipalities that surpassed 40% have far larger territories. Santo Tirso, Paredes, and Oliveira de Azeméis, for example, all have significantly more than 100 km². For reference, the municipality of Lisbon is around 100 km².

What matters is this: most people don't move away from Porto because they don't appreciate the capital of the North. It simply becomes ever more expensive to buy a home in that city, and the appreciation (together with the frustration of those who can no longer afford to buy) gradually spreads to the nearest alternatives. First, Matosinhos and Gaia, its most obvious geographic extensions. Then, other locations with infrastructure and transport links that offer a lifestyle comparable to what one might find in Porto.

This pattern recalls what we have already observed in the LMA. There too, at a certain point, the most expensive markets began to appreciate less than many of the peripheral municipalities. In the last two-year period analyzed, Cascais and Lisbon were the two municipalities in the LMA where prices rose the least, while Barreiro and Moita, the two "cheapest," surpassed 50%.

The difference seems to lie, once again, in the moment at which this happens. What was already being felt earlier in Lisbon now appears more clearly in the Porto Metropolitan Area. The slight lag between the two regions, mentioned at the start of this article, thus becomes apparent again. Not necessarily because one appreciates more or less than the other, but because the wave seems to be at different stages of its journey across the territory.

That said, the correspondence between home appreciation and distance from the city is not linear. Arouca and Vale de Cambra, two of the municipalities farthest from the center of the PMA, show precisely the two lowest rates of appreciation. But neither seems able to reproduce the urban experience of those who live in Porto or Matosinhos.

In the particular case of Arouca, that contrast may have contributed to the one-off appreciation recorded during the pandemic period. I would recall that this municipality appreciated by 9.4% between 2018 and 2020, shot up 33.6% during the pandemic period, fell back to 7.2% in the following two years, and now stands at 8.5%. In other words, the appreciation recorded during the pandemic is an absolute exception in this municipality's behaviour over the eight years analysed. These data do not, in themselves, prove that that rise resulted from demand for more space or for less densely populated areas. But they reinforce the idea that something singular happened there, in that period (and let us recall that we identified a similar pattern in the LMA during the same two years).

Q1 2018 – Q1 2026

EIGHT YEARS ON: PRICES HAVE DOUBLED

The first observation is significant: in 16 of the 17 municipalities of the PMA, prices at least doubled between Q1 2018 and Q1 2026. Arouca is the only exception, at 70.1%. And in two municipalities, prices even tripled: Vila Nova de Gaia (202.5%) and Valongo (201.1%). Gondomar and São João da Madeira came close, with increases of 194.2% and 189.1%, respectively.

Porto ranks only 8th among the 17 municipalities, despite rising by 154.5%. It is an excellent example of how important it is to be sensitive when saying that Porto "appreciated less". In reality, the price multiplied more than 2.5 times in eight years. It is simply that there were seven municipalities where it rose even more.

Looking at the eight years as a whole, however, it becomes clear that this expansion of appreciation towards the periphery has not yet reached, in the PMA, the same territorial extent we observed in the LMA. The three municipalities where prices rose the most since 2018 — Vila Nova de Gaia, Valongo, and Gondomar — are all geographically very close to Porto. Gaia and Gondomar directly border it; Valongo does not, but lies immediately beyond that first ring. In the LMA, by contrast, the largest accumulated appreciation is found in municipalities such as Moita, Barreiro, Sintra, Setúbal, or Seixal, where geographic proximity to Lisbon is less evident.

These data suggest that, although the appreciation of the real estate asset (and, with it, the capacity to attract investment) spread from the center of Portugal's two largest cities to their respective peripheries, in the north — even accounting for that lag — the strength of this cascade effect appears to have been more territorially limited.

PORTO CITY PARISHES

Q1 2018 – Q1 2020

MUCH MORE THAN THE BAIXA

Over this period, we can confirm a fairly robust evolution in housing prices in the city of Porto. It is reasonable to assume that a significant part of the appreciation in the Union of Parishes of Cedofeita, Santo Ildefonso, Sé, Miragaia, São Nicolau and Vitória – the city's most historic area, encompassing the Baixa (downtown) and Ribeira districts – had already taken place in earlier years. As can be seen in Table 4.1, rising prices are already making themselves felt more clearly in the surrounding areas.

The most striking case is undoubtedly Bonfim, where prices rose by 72.5% in just two years (a change I will return to later), the largest appreciation recorded in the city over this period. Campanhã advanced 50.8%, and the Union of Parishes of Lordelo do Ouro and Massarelos 40.0%. The fact is that the figures for the seven parishes of Porto suggest that the appreciation, initially more concentrated in the central areas, was already spreading to other parts of the city.

It is worth noting, on the other hand, that the Union of Parishes of Aldoar, Foz do Douro and Nevogilde – home to some of Porto's traditionally most sought-after residential areas, namely Foz and the final stretch of Avenida da Boavista – remained the most expensive area in the city, yet it was the one that recorded the least abrupt appreciation: 26.4%. A significant rise nonetheless, especially considering that it started from a higher price level.

Q1 2020 – Q1 2022

THE PANDEMIC DOES NOT SLOW PORTO DOWN

What is usually identified as the pandemic period does not appear to have affected the evolution of housing prices in Porto in the same way it affected Lisbon. Between Q1 2020 and Q1 2022, all seven parishes in the city recorded appreciation and, in six of them, the increase exceeded 20%.
Some slowdown is evident: five of the seven parishes appreciated less than in the previous two years. The trajectory also became less linear, with some occasional quarter-on-quarter declines. But none of these circumstances was enough to reverse the strong upward trend over the two years as a whole.

The behavior of the Union of Parishes of Cedofeita, Santo Ildefonso, Sé, Miragaia, São Nicolau and Vitória is particularly telling. Despite including the Baixa (downtown) and Ribeira – two of the city's areas most exposed to the abrupt collapse in tourism and to the restrictions imposed during the pandemic – prices rose by 21.4% between Q1 2020 and Q1 2022.
The contrast with what we saw earlier in Lisbon's historic center (I would recall that, over this same two-year period, prices fell in the parishes of Misericórdia and Santa Maria Maior) is quite significant. In Porto, even the historic center appears to have registered little of the pandemic's impact on housing prices.

In short, the city's appreciation curve remained remarkably strong. Bonfim was the only parish where prices rose by less than 20% (10.9%), but this result is hard to analyze in isolation. In the two immediately preceding years, that same parish had recorded an extraordinary rise of 72.5%.
At the opposite end is Campanhã, where prices rose by 72.0% in just two years (a figure I will return to later), followed by Ramalde, at 36.4%, and Paranhos, at 26.1%. Campanhã and Ramalde were the only two parishes where appreciation accelerated relative to the previous two years.
More than halting the rise in prices, the pandemic slowed the pace across much of the city, without, however, calling into question the upward trend that held throughout Porto.

Q1 2022 – Q1 2024

THE RATES RISE, BUT SO DO THE PRICES

Between Q1 2022 and Q1 2024, the property market faced a very different reality. After several years of extraordinarily low interest rates and a long stretch in which the main Euribor maturities remained in negative territory, the cost of money rose sharply. It is worth recalling that, ceteris paribus (all else being equal), a rise in interest rates tends to reduce borrowing capacity and demand, exerting downward pressure on prices.

In Porto, however, the data show remarkable resilience. Six of the city's seven parishes once again recorded double-digit appreciation over the two years, and the exception (Lordelo do Ouro and Massarelos) can hardly be said to have fallen far short of that mark: it appreciated 9.9%. More striking still: in four of the seven parishes, appreciation was higher than that recorded between 2020 and 2022. This is the case for Aldoar, Foz do Douro and Nevogilde; the historic center; Paranhos; and Bonfim.

After Campanhã's extraordinary appreciation in the previous two years, Paranhos now posts the largest rise, at 33.9%, followed by Bonfim, at 28.1%, and the Union of Parishes of Cedofeita, Santo Ildefonso, Sé, Miragaia, São Nicolau and Vitória, at 26.4%. Campanhã slows to 18.2%, a reduction that should be read in the light of the 72.0% recorded in the previous two years. The same is true, though on a smaller scale, of Ramalde: appreciation fell from 36.4% to 21.7%.

If the broad rise in prices in the post-troika period began later in Porto, it is also reasonable to assume that, at this stage, it still had more room to appreciate.
In any case, this period is as follows: the cost of money changed; the direction of prices did not.

Q1 2024 – Q1 2026

THE RATES FALL, BUT APPRECIATION SLOWS

Between Q1 2024 and Q1 2026, something rather curious happens.
After housing prices in Porto withstood one of the fastest rises in interest rates in decades, it would have been reasonable to expect the reversal of that cycle to renew appreciation's momentum. The cost of credit began to fall and, at the same time, significant demand-side incentives were introduced, notably the exemption from IMT and Stamp Duty for younger buyers and the public guarantee on home loans.
And yet, prices tell a somewhat different story.

Median values per square meter continue to rise across all seven parishes of the city, it is true, but in five of them appreciation was lower than in the previous two years. Only two areas accelerated: Ramalde and Lordelo do Ouro and Massarelos. In other words, precisely when some of the conditions that had been constraining demand began to ease, appreciation lost pace across much of Porto.

This apparent paradox may say something about the market's own stage of maturity. After several years of very sharp increases, the room for further appreciation of the same magnitude within the city limits may be growing narrower. Not necessarily because demand has vanished, but because Porto now starts from higher price levels, which may make it progressively harder to repeat appreciation of that scale.

And this is where the comparison with the Lisbon Metropolitan Area gains its full relevance. While appreciation in both cities appears to lose some intensity, we have already seen that the most striking increases are emerging just beyond their limits. Demand does not necessarily have to disappear; it may simply shift to markets where starting prices are lower, where more land is available, and where new projects can reach the market at prices accessible to a broader universe of buyers.

There is, therefore, no suggestion here that Porto is saturated. But the data at least allow us to raise the hypothesis that the city is entering a more mature phase of this property cycle: prices continue to rise, but the room for the extraordinary appreciation of the early years is beginning to run out.

The crest of the wave is not disappearing. It appears simply – as, indeed, we have already observed in the analysis of Lisbon and its metropolitan area – to be moving out of the city.

Q1 2018 – Q1 2026

REGENERATION REDRAWS THE CITY'S MAP

Looking now at the eight years as a whole, one figure is hard to miss: between Q1 2018 and Q1 2026, median housing values at least doubled in every parish of Porto. But they did so at very different speeds. Aldoar, Foz do Douro and Nevogilde, already starting from the city's highest level, advanced 107.3%. At the opposite end, Campanhã appreciated 236.5% (which, to leave no doubt, means the median value per square meter more than tripled). In between, the median value per square meter in Bonfim almost tripled, up 193.8%.

A small caveat. The quarterly series used in this study begins in early 2018, so it is reasonable to assume that much of the appreciation in the Baixa and the historic center had already taken place before then, reflecting the intense process of urban regeneration that transformed that part of the city. Rather than capturing the initial explosion of that process, these data allow us to observe its gradual spread to other areas of Porto.

It is also here that we should return to the two changes deliberately left unexplained over the course of this analysis: the 72.5% recorded by Bonfim between 2018 and 2020 and the 72.0% by Campanhã in the following two years.

Figures of this magnitude should not be read as if the same house, entirely unchanged, had necessarily appreciated in that proportion over a span of 24 months. In a context of intense urban regeneration, part of the rise stems from value being built into the property itself. A deeply renovated home is not the same product it was before the works. It involved design, a building project, materials, and labor. And, often, features were added that had not existed before.

This affects how the indicators themselves are read. The median values calculated by the INE reflect the homes actually transacted in each period. If a given parish records a growing number of transactions of refurbished apartments or newly built properties, qualitatively superior to the stock that previously reached the market, the median also rises because, in a sense, the homes now being sold are different from those sold before.
Part of those changes above 70% may therefore reflect market appreciation; another part may reflect value literally created through the transformation of the built environment.

But the process does not end at each building's front door. When regeneration is repeated systematically, it transforms the surrounding space. It is one thing to buy a run-down house on a street dominated by equally run-down buildings, and quite another to acquire that same property once many of the façades around it have been restored, new businesses have arrived, and the very perception of the place has changed. At that point, part of that collective transformation also begins to be built into the price of land and of the properties that have not yet been intervened upon. That is: into location.

One only has to do a small exercise in memory. How many corners in the vicinity of Praça dos Poveiros, the Jardim de São Lázaro (the city's oldest public garden), Campo 24 de Agosto or Largo Soares dos Reis were considered run-down or best avoided? And how many of them, over the last half-dozen years, have come to host establishments featured in Time Out or other lifestyle publications?

We should not presume a house in Campanhã is worth more than three times today what it would have been worth in 2018, had nothing changed, either in it or around it. The houses being sold have changed, and so too — at least in part — has the urban fabric in which they sit.


What about the future?

Curiously, some of the greatest changes are concentrated there. After the Intermodal Terminal, the conversion of the former Industrial Slaughterhouse is underway (its opening scheduled for 2027), set to create a new business, retail and cultural hub next to the Estádio do Dragão.
More importantly, the Campanhã Urbanization Plan aims to take advantage of the future adaptation of the railway station to the high-speed line to transform not just the station, but its relationship with the city itself.

Anyone who knows Porto well is aware that Campanhã Station has functioned, to a large extent, as an urban barrier: the Largo da Estação is its recognizable frontage, and what lies "beyond the station" seems almost to belong to another city. The future station is meant to engage with both sides of the railway infrastructure, so revitalization of the streets on the side opposite Largo da Estação can be anticipated.

It is, therefore, particularly interesting to look again at the 236.5% recorded over the last eight years. Campanhã remains the cheapest parish in Porto, and some of the interventions with the greatest capacity to alter its relationship with the rest of the city are still to come...

MUNICIPALITIES OF DISTRICT CAPITALS
AND REGIONAL GOVERNMENT SEATS

"From Bragança to Lisbon

It's a 9-hour journey

I wish I had a plane

To go there more often (...)"

Para ti Maria, Xutos & Pontapés (1988)
[translated from the Portuguese original]

COAST VS. INTERIOR: THE GREAT NATIONAL CONTRAST

Those lines about the distance between the main character and the girl he loves by Xutos & Pontapés (one of the most famous bands in the history of Portuguese rock) are just a bittersweet portrait of a reality that illustrates the contrasts: 1) in the way populations occupy the territory; 2) in the conditions available to them to be able to move around.

In this case, Bragança is the district capital farthest from Lisbon. These regional disparities led to the emergence of well-known SCUT roads, for example, toll-free highways for users. It is also because of them (alongside the recurring goal of connecting Lisbon and Porto in half the time) that the railway has been so widely discussed under successive governments.

The truth is that Guarda – the district capital whose municipality has the lowest median price per square meter among all district capitals (and the one where prices evolved most weakly over these eight years) – is the same city that had no rail connection to Lisbon from April 2022 to September 2025.

If we split Graph 8 down the middle, we notice that among the 10 capitals with the highest median home prices (those with a median price per square meter above €2,000, whose bars are colored red, orange, and yellow), we find only three that are not bordered by the sea or an estuary: Évora (a city with a deep tourism tradition), Coimbra (an unavoidable waypoint on the axis between Lisbon and Porto, and the largest city in the Centro region), and Braga (the largest urban center outside the Lisbon and Porto metropolitan areas). That said, Braga and Coimbra lie roughly 30 km and 40 km from the nearest beach, respectively, and both belong to the country's coastal strip.

But that's little more than what most 10-year-olds have already learned in school: most of the population and opportunities are concentrated along the Portuguese coast. We should also add that demographics are one of the fundamental factors in appreciating residential property.

Another note on the 10 "most expensive" capitals is that all of them are home to a university. Higher-education institutions tend to affect the residential market. Student demand for rooms and apartments puts pressure on the rental market and, consequently, inflates home market values (remember when I mentioned that a house is worth a multiple of the rent someone is willing to pay to live there?). That said, the impact on local economies does not end with housing.

Researchers have identified a curious, well-documented effect they call the "stickiness" of places of study: where we attend university influences the likelihood of settling in that city or region. The mechanism is intuitive: the years spent in a place create bonds, cultivate social and professional networks, ease entry into the job market, and, so often, it is also there that we meet the partner with whom we share the years that follow. Moving to another city now carries a cost – economic, professional, and emotional – that did not exist before.

The most interesting part is that many who choose where to study do so not for the city, but for the program or the institution. Or they may be placed in a program, university, or city that was not their first choice. The city ceases to be a matter of indifference not because it was desired, but because it is lived.

As for Graph 9, Setúbal is clearly the district capital with the steepest rise in prices. But it is curious because, when we looked at the Lisbon Metropolitan Area, Setúbal did not even feature among the three municipalities with the largest price increases: in that context, its impressive appreciation almost seemed to be, if I may allow myself the irony, "just another municipality in the Lisbon Metropolitan Area where prices tripled in eight years."

As for the district capitals marked in blue on the graph – those where the median price per square meter of homes did not even double over the eight years – we have Lisbon (the most expensive city in the country, which naturally started from a much higher base), Coimbra (about which I'll share a curious fact shortly), and six interior cities, three of which no longer have a rail connection. A fourth, Portalegre, is served by a station that sits literally in the middle of nowhere, about 10 km from the city, along the route linking Entroncamento to Badajoz (Spain).

Regarding Coimbra, in the first quarter of 2018, the start of this analysis, the figures for this city and for Porto were €1,179/sq m and €1,379/sq m, respectively: a difference of 17% in Porto's favor. In the first quarter of 2026, the figures were €2,210/sq m and €3,510/sq m, respectively: a difference of nearly 60%.
I would venture to say that, despite being home to the country's oldest university and offering direct rail connections to Lisbon and Porto, Coimbra did not keep pace with the rise Porto achieved over these eight years: driven, among other factors, by a competitive airport, surging tourist demand, a torrent of Erasmus students, a greater ability to attract businesses, and a business school featured in international rankings.

TOP 20

WHICH ARE THE 20 MOST EXPENSIVE MUNICIPALITIES IN THE COUNTRY?

Do you know which are the only regions that, according to the 2021 Census, recorded population growth over the previous 10 years?
The Lisbon Metropolitan Area (LMA) and the Algarve.

Coincidentally or not (and I'll "vote for not"), of the 20 municipalities where buying a home is most expensive in Portugal, 17 are concentrated precisely in these two regions: 10 in the Algarve and 7 in the LMA. The remaining 3 municipalities in this "Top 20" are Porto and Matosinhos, in the Porto Metropolitan Area, and Funchal, in Madeira. And there is not, as the reader will already have guessed after the topic was addressed in the previous section, a single municipality in the interior.

The concentration in the Algarve can hardly be separated from tourism and the region's resulting exposure to international demand. The same is true, though for a broader set of reasons, in the Lisbon Metropolitan Area.

I've written in this article about the absurdity of trying to measure the true scale of foreign demand through the indicator the INE chose for the purpose (tax residency, as if there were not a whole universe of foreign citizens who buy homes in Portugal despite not having their main residence here), and about the haste with which the media and self-styled experts comment on data they seemingly do not understand.

In any case, one need only look at the geography of Graph 10 to recognize, at the very least, that there is a tendency for the country's most expensive residential markets to coincide (in my view, without coincidence) with the territories where the pressure of external, tourist, and metropolitan demand is most evident.

This is not about demonizing foreign demand (in fact, people in my line of work – real estate consulting – benefit greatly from it), but about trying to recognize the true causes of these phenomena. Failing to do so may mean attributing to other phenomena an impact that does not belong to them. And that not only creates obstacles to knowledge: it also prevents (or, at best, constrains) the design of appropriate solutions.

Graph 11 shows us how these municipalities became more expensive. The median price per square meter roughly doubled to tripled over these eight years. We saw earlier, when we looked at the country's two metropolitan areas, that the pace of appreciation in Matosinhos is higher than that recorded in the city of Porto, bearing in mind that any of the 17 municipalities surrounding Lisbon in its metropolitan area (and, all the more so, all those in this "top 20") also recorded sharper appreciation than the capital.

A word, too, about my choice for this part of the article: Top 20. If the conversation is about real estate, what is happening in these 20 municipalities might be considered exciting. If it is a conversation about housing – or about access to it – it is above all a cause for concern. But this is, in fact, the portrait of the country's most expensive municipalities at the start of 2026.

CONCLUSIONS

Eight years, four two-year periods, hundreds of median values. If these numbers leave one thing in no doubt, it is that, between Q1 2018 and Q1 2026, housing prices rose significantly across almost the entire country.

In the overwhelming majority of municipalities in the two metropolitan areas, the median price per square meter doubled; in several, it tripled. And earlier studies suggest this trajectory had already been taking shape since mid-2015.

Between the first quarter of 2018 and the first quarter of 2026, we went through periods of negative interest rates, a pandemic, an inflationary crisis, and the steepest rise in Euribor history. We also went through restrictions on tax and immigration-policy regimes that had stimulated foreign demand, through changes in mobility patterns (people's relationship with their workplace profoundly alters their relationship with where they live), through public incentives for home purchases by young people, and through a profound transformation of significant parts of our cities' built environment.

And yet, despite all these forces having acted in different, and at times opposing, directions, the dominant trend remained the same: prices kept rising.


THE WAVE (OR THE WAVES)

The most persistent pattern of these eight years is a wave (or several waves) representing an upward price trend. That appreciation did not occur everywhere (but almost), nor did it occur at the same time. It first formed in the historic centers of Lisbon and Porto, spread within each city, and finally extended to their respective peripheries. At a certain point, it is often the cheaper municipalities, not the most expensive, that record the sharpest pace of appreciation.

In the last two-year period, Lisbon and Cascais, the two most expensive municipalities in the country, were precisely those where prices rose the least in the Lisbon Metropolitan Area (LMA). At the same time, Moita and Barreiro, the two most affordable, exceeded 50%. It is the crest of the wave pulling away from where it all began.

To the north, the same film plays with a slight delay. What had already become evident in Lisbon some time ago (the slowing of central markets and the acceleration of the periphery) only now, in the last two-year period, becomes clear in the Porto Metropolitan Area (PMA), where Porto itself and Matosinhos become among the municipalities appreciating the least.

The waves are similar. They are simply at different stages of their journey. And there is a sign that, to the north, this ripple effect was territorially more contained: the largest cumulative gains in the PMA are concentrated closer to Porto, whereas in the LMA they are already found in municipalities geographically somewhat farther from the capital.

In any case, wherever we are in Portugal, virtually every district capital and municipal seat has an old core and, however small, a handful of centuries-old buildings. That's where the appreciation process often begins, taking on another dimension as rehabilitation projects multiply.

Better than living in a rehabilitated building is living on a street or in a neighborhood where that effect repeats itself. And that "better" translates very simply: into price.

For this reason, the most striking variations we have seen in this article should not be understood merely as the appreciation of the same asset ceteris paribus. Often, the property sold two or three years later is, in practice, a different real estate product, one that incorporates the value of the project, the construction work and, at times, even the transformation of its surroundings.

THE COAST, ALWAYS THE COAST...

When we step away from the two metropolitan areas and look at the country as a whole, a second pattern emerges with striking clarity.
Of the twenty municipalities where buying a home is most expensive in Portugal, seventeen are concentrated in just two regions, the Algarve and the LMA, the only ones that, according to the 2021 Census, gained population between 2011 and 2021. And none of those twenty municipalities is in the country's interior.

It is no coincidence.
Demographics are a structural factor in property appreciation, and the bulk of the population and opportunities are concentrated along the coast. Added to this is exposure to foreign demand – more tourism-driven in the Algarve, and more multifaceted in the Lisbon and Porto regions – and the often underestimated effect of university cities, where the student rental market pushes up values, and where the "stickiness" of young people to the places where they study is well documented (that is, a tendency to remain in the places where they lived during the first years of adult life).

With some exceptions, the country's more interior regions (far from coastal areas, without major universities and, in several cases, without even a rail connection) end up on the opposite side of all these forces.


WHAT HAS CHANGED IN THE LAST TWO YEARS AND WHAT MAY CHANGE SOON

When I analyzed this same data two years ago, the story ended, in the first quarter of 2024, with interest rates at their peak and demand contracting. It was reasonable to expect what almost everyone expected: that prices would keep rising, but more slowly.

The slowdown in prices did not happen. And the explanation seems to lie largely in three stimuli that came together from mid-2024: the fall in Euribor, the exemption from IMT and Stamp Duty for buyers aged 35 or under, and the government guarantee that allowed these young buyers to finance up to 100% of the purchase price (and which, in 2025, as I mentioned earlier, accounted for 18.8% of new mortgage agreements for a primary residence and 21.3% of the amount lent). The reaction was measurable and quick to make itself felt: 2025 ended with the highest number of homes sold on record in Portugal.

As recently as July of this year, according to Banco de Portugal, "New housing loan agreements increased by 166 million euros, to 2,345 million euros, the highest value in the series." In other words: this was the month with the largest volume of new mortgage agreements since December 2014.

It is worth looking, however, at what is happening on the financing side. After a long cycle of cuts in 2024 and 2025, the European Central Bank (ECB) reversed course: it raised interest rates in June 2026 (the first increase since 2023) and did so again on September 10. It was the first major central bank to raise rates in response to the current energy shock.

And the root of the problem shows no signs of resolving quickly. Energy prices have surged again with the conflict in the Middle East, compounded by a geopolitical landscape that the prolonged war in Ukraine will do little to calm.
ECB officials have already acknowledged that inflation is likely to prove more persistent, and it is not expected to return to around the 2% target until the end of 2027.

Now, when inflation rises and threatens to take hold, central banks have a familiar playbook: raise rates to contain it. Further increases are not certain (the ECB itself refuses to commit to a path, and economists and markets disagree about what lies ahead), but expectations for the near-term path of interest rates seem to have reversed. For anyone who has (or is about to take out) a Euribor-indexed mortgage in Portugal, this means one simple thing: the relief in monthly payments felt since mid-2024 is reversing.

Whether prices will fall or merely temper their rise, as happened the last time rates went up (the two-year period Q1 2022 – Q1 2024), I do not know. But if this trend is confirmed, the residential market will hardly remain immune.

THE DIFFERENCE BETWEEN TALKING ABOUT REAL ESTATE AND TALKING ABOUT HOUSING

I believe that, having reached this point, another kind of reflection is warranted.

Over eight years, prices doubled, tripled and, in some cases, almost quadrupled. Household income came nowhere close to keeping pace with that trajectory: from 2019 to 2025, the house price index rose by around 80%, while median income grew by close to 34%. This divergence has several striking illustrations: in Lisbon, in 2023, the theoretical monthly payment to buy a median-sized home was equivalent to 102% of a median household's income. Note that we are no longer discussing whether the payment is burdensome or excessive: it exceeds the household's entire income.

This is the line that runs through the whole article. If the conversation is about real estate, what these eight years tell is a story of appreciation, of investment drawn in, of a country that became visible and desirable. That story is real, and as a consultant and broker, it is my job to tell it.

As a market analyst in a broader sense (and an engaged citizen), it would be bizarre to limit myself to celebrating the number and volume of transactions, as if we weren't talking about something as basic as having somewhere to live. And the truth is, today it seems impossible to talk about housing demand without confronting another reality: the concept of home that many now resign themselves to at the start of the second quarter of the 21st century would have been hard to conceive just 20 years ago. One would expect housing standards to have risen over this period. Unfortunately, for many Portuguese, they have fallen.

Because if the subject is housing and access to it, this is above all a story of drifting further away. If an essential good (and the one on which the overwhelming majority of us spend the largest share of our budget) becomes more expensive at a pace far outstripping our incomes and that of most other goods and services, then, as we move further from having that need met, we also become poorer.

This inaccessibility has also fostered the emergence of business models built on exploiting residential scarcity itself. I am talking about solutions that represent a marked step backward in people's material living conditions.

I am referring, for example, to the residential use of spaces (among others, storage rooms and garages) that do not offer the healthiness, safety, or dignity expected of a space meant for housing. But I am also referring to overcrowding and the extreme subdivision of space, to the point that, when searching for rooms to rent, we come across rooms with seven beds or three bunk beds.

In October 2025, I wrote about this reality in "BUNKBEDLAND – The B-side of an impoverished country". Some individuals and households can no longer even secure a room of their own in a shared home: there are rooms full of beds, almost always bunk beds, where complete strangers share what one would imagine to be the last refuge of privacy: the space where one sleeps. You only have to scroll through the listings for rooms to rent in Lisbon, Amadora, Porto, or various Algarve cities to realize that none of this is abstract.
You can see this reality for yourself right here.

Last year, a start-up was born in Spain whose value proposition is selling ownership of individual rooms, with co-ownership of the common areas and, according to the press, its own entry in the property register. Here, perhaps, the question of legality does not even arise, as it did in the previous example. But the model's possible legal compliance should not stop us from considering what it reveals: how much, in recent years, what we expect of a home has deteriorated, whether in its use or as an investment.

WHEN INCENTIVES AIM AT THE WRONG TARGET

You probably have no idea that, in 2026, a studio, one-bedroom, or two-bedroom apartment (T0, T1, or T2) for sale at €650,000 – even somewhere in the most remote corner of the districts of Bragança or Portalegre – qualifies, under the new law, as "moderately priced" housing (a "moderate sale price"), and may benefit from the tax regime provided it meets the remaining legal requirements.

Which is the same as saying that housing qualifying for a "moderate sale price" includes homes that virtually do not exist. That is, it is possible that in those districts there are no apartments at all of those types (or larger) at that market value.

And this at a time when, as of the publication of this article, the most expensive apartment available on Idealista in the municipality of Bragança is a five-bedroom (T5) listed at €470,000 (on the market for over 170 days; I would venture that it will not be long before it undergoes a price cut), and the second most expensive a four-bedroom (T4) at €345,000. In the municipality of Portalegre, also as of publication, the most expensive apartment was a four-bedroom (T4) at €299,000. Though when I ran this same search a few days ago, there was also another four-bedroom at €315,000.

There is just one problem: as I believe has been shown, the government decided it could call a "moderate sale price" something that even the most basic common sense would never accept as such.

In a country where the public and the political class were better informed, it would have been understood that the pricing framework on which this law rests will tend to subsidize the construction of housing at prices that not even the most absent-minded Secretary of State for Housing would dare to call moderate.

My criticism is therefore not directed at the proposal itself, but at its scope. Even though that same scope, which I so openly oppose, favors my own economic interests.
If I broker the sale (or purchase) of homes worth €600,000, my income will predictably be 50% higher than what I could earn brokering the sale of €400,000 homes (or exactly double, assuming €300,000 properties).

Such is my conviction that, earlier this year, I published the article "How moderate are a rent of up to €2,300 and a price of up to €660,982?" and shared it with various parliamentary groups and with the Budget, Finance and Public Administration Committee of the Assembly of the Republic, where the bill was to be debated.


What the tax break is meant to achieve is that, in a scenario where the construction work represents 50% of the project's total cost before VAT (this is just an example, to illustrate the spirit of the incentive), the reduction of VAT from 23% to 6% – that is, 17 percentage points less applied to half the cost – produces a saving equivalent to 8.5% of the total cost, which the developer can pass on, even if only partly, to the final price.

Nothing obliges them to do so, but it is reasonable to assume that many companies will consider it also in their interest to pass at least part of that saving on to the final price. On the day Parliament approved this tax package, I interviewed the CEO of a large property development company. He told me then that they were considering explicitly showing clients the value of the tax saving reflected in the price.

Beyond attracting undifferentiated investment, this tax benefit helps encourage property developers to invest in the market segment where the country most needs supply.
The purpose is to change the equation of a business plan, making a given investment more appealing and less risky in the developer's eyes. And not to encourage construction in the prime segment, which the sector already serves organically.

Even acknowledging that, in the four or five most expensive municipalities in the country, €650,000 for a three- or four-bedroom home may correspond to a mid-range band of the market, it is bizarre to apply that value across a universe of 308 municipalities where, in the overwhelming majority of cases, €650,000 is more than a person can put together in net income over an entire working life.

It probably would have made sense to establish three or four brackets based on the median housing prices calculated by INE, to set the limits sensibly (otherwise, we are giving those who asked for more decentralization the one thing they do not want from Lisbon: its house prices). And even in the capital, where the price per square meter is highest in the country, it is hard to understand how a studio or one-bedroom at €650,000 can meet the legal definition of a "moderate sale price."

The math is quite easy to demonstrate. Let us imagine the studio or one-bedroom is 60 sq m (a perfectly reasonable size for these types). We would have the State designating as a "moderate sale price" a property transacted at €10,833/sq m, more than double the median price per square meter in Lisbon, the most expensive municipality in the country.

What is truly important to stress is that every developer the incentive fails to draw into producing genuinely moderately priced housing – and every share of capital, land, technical capacity, or labor that instead ends up channeled into the prime segment – represents a missed opportunity to direct resources to where the country most needs them: the construction of affordable housing.

Because resources are finite and, as such, the different market segments compete for the same capital, the same land, and the same labor.
And of course, it will also mean the State will subsidize housing through a tax benefit at prices that are anything but affordable or moderate.

If the stated goal is to increase supply and ease access to housing, it may be worth asking whether fiscal policy should not be more aggressive (taking the benefit to the maximum legally permissible), yet far more restrictive in its maximum eligibility thresholds, ensuring that the reduction is granted sensibly: something this new tax framework fails at spectacularly.

If access to housing is treated simultaneously as a constitutional right, a political priority, and a "national mission," to what extent does it make sense for the State to take such a significant share of every euro mobilized to build or acquire housing at prices affordable to the Portuguese (in a context as sensitive as the present one), yet whose supply the market has been unable to generate?

Another telling example lies in the tax burden imposed on those buying, for the first time, a home as their own permanent residence. It is just as well that young people up to the age of 35 can now benefit from an exemption from Property Transfer Tax (IMT) and Stamp Duty, under the terms and limits set out in the law.

It is a choice hard to reconcile with what the State itself enshrined in its fundamental law: "everyone shall have the right for himself and his family to a dwelling of adequate size satisfying standards of hygiene and comfort and preserving personal and family privacy" (Article 65 of the Constitution of the Portuguese Republic). I am not talking about exempting every purchase and sale a person makes over their lifetime. Just this: the first purchase of a home as one's own permanent residence.

The latest available INE data (dividing the total value of transactions by the number of homes transacted) suggest the average transaction value in the first quarter of 2026 was around €262,300. Do you know how much IMT and Stamp Duty a buyer not covered by the youth exemption would have to pay when acquiring, for the first time, an own permanent residence at that value? According to the Doutor Finanças simulator (you can check here): €10,001.44.

Ten thousand euros. A figure equivalent to 3.8% of the purchase price, which, for someone who needs to finance close to 90%, may quite simply determine whether or not they can buy that home.
And this to carry out what will presumably be the largest financial transaction of their life, with a single purpose: to secure their own housing.



I therefore end where I began: with the figures.

The two conversations – the one about real estate and the one about housing – concern the very same reality and start from the same data. Yet, despite their common ground, they suggest very different readings. After all, as the graphs display these impressive gains, more and more people feel their plans slipping away.

An article like this provides context and market information. But if it serves any greater purpose, it should also remind us that behind every median value and every change over the last quarter, year, or two-year period, someone is looking for a place they can call home.

AUTHOR'S FINAL NOTE

When someone is thinking of buying or selling a residential property, it is common to base their expectations about the amounts they will spend or receive on the content of articles like this one. However broad, deep, analytical, and critical a text may be, it is a mistake to value reflections like this beyond a simple contextualization.

Do you have even more reason to read this article if you are considering buying or selling a property? Without a doubt. Even so, the merit of this text is not enough to assess the market value of a given home, nor is that its purpose.

When someone is thinking of buying an apartment in Matosinhos, a house in Belém, or a home in any of the other places mentioned in this article, they need to understand (or at least try to understand) what is happening right there.
Each neighborhood has its own unique characteristics and trends. Grasping these nuances is decisive in making well-informed decisions.