The Portugal property market continues to make headlines in 2025, especially in the cities of Lisbon and Porto. While Portugal’s real estate prices have generally increased, new data from the National Statistics Institute (INE) reveals that house prices are now falling in some city neighborhoods—highlighting the patchwork nature of the Portugal property tax and housing landscape.
House Prices Drop in Parts of Lisbon
Despite Lisbon’s reputation for soaring prices, the latest numbers show declines in several parishes. Over the year ending in June 2025, the average Lisbon property sold for €4,525 per square meter (a 7.7% annual rise overall). Yet, not all neighborhoods followed this upward trend. Seven out of the city’s 24 parishes saw house prices decrease, with the most significant drops in Marvila (-16.9%) and Areeiro (-12.7%). Other areas with falling prices include Santo António, Santa Maria Maior, Arroios, Misericórdia, and Belém.
However, other Lisbon neighborhoods are seeing strong growth. Areas like Beato (up 32.3%) and Campolide (up 23.4%) are experiencing double-digit price increases. It’s notable that seven Lisbon parishes now have real estate prices topping €5,000/m², with Santo António the most expensive at €6,031/m²—even after a price correction. Parque das Nações is close behind, reaching €5,840/m², up 17.4% in just one year.
More affordable options do exist; Santa Clara remains Lisbon’s least expensive parish for homebuyers, with an average price of €3,450/m² (up 5.6%).
When it comes to volume, Lumiar saw the highest number of property transactions (857 sales), while Carnide recorded the fewest (128).
Porto Property Market: Lower Prices in Prime and Up-and-Coming Areas
The scene in Porto contrasts with Lisbon’s high values, with overall more accessible home prices. The average Porto property sold for €3,060/m² as of June 2025—marking a modest annual rise of 2.3%.
Some Porto areas haven’t escaped price declines. Notably, Campanhã—a district undergoing rapid development—saw prices dip by 8.5% to €2,819/m². Meanwhile, the prestigious Union of Parishes of Aldoar, Foz do Douro, and Nevogilde registered a 3.6% fall, yet still commands some of the city’s top prices at €3,836/m².
Other Porto districts are seeing stronger growth; the Union of Parishes of Lordelo do Ouro and Massarelos posted a 10.5% price increase—the municipality’s fastest-growing.
In terms of transactions, Paranhos led the pack with 1,002 home sales, while high-end Aldoar, Foz do Douro, and Nevogilde had just 354.
What Does This Mean for Portugal Real Estate Buyers and Investors?
The Portugal property tax situation and ongoing price movement present both challenges and opportunities for buyers and investors. While some parishes are cooling off, others are becoming ever-more desirable. Understanding these nuanced trends is vital for anyone looking to navigate Portugal’s property market in 2025.
Looking for more on Portugal real estate prices and property tax developments? Stay tuned for updates as the market continues to evolve.
