Discover how Portuguese families are driving the Portugal residential real estate market trends in 2025, while foreign buyer demand falls. Get insights on trends, prices, and what’s shaping the property market this year.
Portugal Residential Real Estate Market: Key Trends and Insights for 2025
The Portugal’s residential real estate market has undergone a significant transformation in 2025. For the first time in years, Portuguese families are once again the main force driving home sales, while foreign demand is diversifying and, in some cases, softening. Here’s a closer look at the latest data, how key regions are performing, and what these shifts mean for buyers and investors.
National Buyers Take Center Stage
According to Century 21 Portugal’s first-half results, domestic buyers now represent 77.7% of market transactions, up sharply from 68.1% in early 2024. This uptick underlines a powerful recovery in local purchasing appetite—making Portuguese families the primary driver of property sales in 2025.
INE data confirms the trend: foreign buyers accounted for just 5.1% of transactions in Q1 2025—the lowest since 2021—down from a 6% annual average in 2024.
International Demand: A Shift in Profile
While foreign demand is cooling overall, especially from the USA (down to 9.4% of international leads from 24% in 2024), European interest is on the rise.
Notable trends:
- Rising buyers from Germany and Ireland, with significant increases in leads
- Stable growth from Switzerland, France, the UK, and neighboring Spain
- The US market slows but still leads among international buyers; the Netherlands sees a slight dip
This diversification signals a shift as Portugal’s draw extends more strongly to nearby and emerging European markets—helping counterbalance the US slowdown.
Strong Market Performance in 2025
The Century 21 network closed 10,860 transactions and a turnover of €2,579 million in the first six months of 2025—a year-on-year jump of 23% in deals and 46% in value. The average property price hit €236,874.
Notably, buyer demand is increasingly active outside Portugal’s major urban centers, with families choosing more affordable homes in peripheral or secondary cities.
Spotlight on Property Types and Locations
Used homes led sales growth across all Portuguese regions, outpacing new builds:
- Lisbon: Used home sales up 29%, new builds up 26%
- Porto: Used up 19%, new up 8%
- Algarve: Used homes surged 35%, new homes 14%
The uptrend is especially strong in secondary areas, as high prices in Portugal’s most popular cities push buyers outward.
Supply Shortages Remain the Market’s Achilles Heel
Despite robust demand and a 25.5% uptick in domestic leads, property supply remains tight. In H1 2025:
- Just 12,564 new properties were listed (1% higher vs. 2024)
- Exclusivity contracts for used homes rose 5%; new homes, 8%
- Efforts focus on matching family needs with available stock, though overall inventory growth is modest
Policy and Lending Support Youth and First-Time Buyers
Recent public guarantee schemes and tax incentives have encouraged younger buyers, but those truly benefiting are households that already met minimum lending conditions, not those with limited means.
Outlook: What’s Next for Portugal’s Housing Market?
Expectations for H2 2025 remain positive but more measured:
- Sales will keep growing, but at a slower seasonal pace
- Price stabilization is likely in prime markets, with possible appreciation in emerging locations as buyers seek better value
- Labour market strength and affordable financing should sustain demand
However, the biggest challenge remains: wages aren’t keeping pace with rising house prices, curbing real demand growth. The market now runs at two speeds—steady in high-value zones, but dynamic in up-and-coming cities as families search for affordability.
The Portugal’s residential real estate market is driven by local families, with international interest both cooling and diversifying. As affordability becomes central and supply remains limited, expect continued strength outside prime areas. For buyers and investors, success in Portugal’s property market will hinge on understanding shifting demand, regional dynamics, and the growing emphasis on affordability.
