Lisbon continues its impressive rise as a star in global real estate, registering house price increases that outstrip major cities such as London and Paris, according to the latest Prime Global Cities Index (PGCI) from Knight Frank. Despite a wider slowdown in the international luxury property market, the Portuguese capital stands out for its resilience and steady growth.
Lisbon’s Prime Residential Market Grows 3.1%
The Knight Frank report, which tracks prime property prices in 46 major cities, reveals that although luxury market growth slowed to its lowest pace in the last two years (with average global appreciation at 2.5%), Lisbon bucked the trend. The city recorded a solid 3.1% annual increase in prime house prices for the third quarter of 2025, placing it 18th in the global ranking.
“These results show Lisbon’s remarkable capacity for growth, continued attraction to investors, and resilience” says Francisco Quintela, founding partner at Quintela + Penalva, Knight Frank’s Portuguese affiliate. Over recent years, Lisbon has consolidated itself as a reference destination for high-quality residential property.
Lisbon Leaves London and Paris Behind
Lisbon’s positive performance is even more impressive in comparison to other major European capitals. Paris posted a modest 1.4% rise while London’s prime market dropped by -3.6% year-on-year, hindered by high financing costs and market uncertainty. Other cities like Berlin (+2.7%) and Dublin (+2.3%) also lagged behind Lisbon.
Elsewhere in Europe, Madrid (+6.1%), Zurich (+5.4%), Geneva (+4.2%), and Frankfurt (+3.1%) posted robust growth, contributing to a continent-wide portrait of stability, but it is Lisbon’s resilience and steady demand that is attracting attention.
Why is Lisbon So Resilient?
Several factors explain Lisbon’s strong performance in a cooling European market:
- Demand exceeds supply: There is a structural shortage of prime housing relative to buyer demand.
- International appeal: Despite recent tax changes, Lisbon remains a preferred city for overseas buyers.
- Market stability: The Portuguese capital has shown remarkable steadiness amid the economic swings that impact other cities.
Experts believe that not only Lisbon, but also Portugal’s other sought-after regions—such as Cascais, Comporta, Estoril, and Porto—have strong price appreciation potential. The continued launch of high-quality residential projects and robust interest from national and international buyers underpins a positive outlook.
Lisbon Positioned for Continued Growth
“Lisbon is more than just a trend—it’s proving to be a secure and dynamic market for prime real estate investment,” concludes Quintela. As the market enters 2026, property prices in Lisbon are set to remain one of Europe’s most compelling stories in the luxury sector.
Thinking of investing in Lisbon or learning more about European real estate trends? Stay tuned for our latest updates and expert insights.
