House prices in Portugal are slowly rising again

Buying real estate in Portugal continues to rise in price, but at a slower rate due to a decline in demand caused by a loss of purchasing power and high mortgage interest rates disproportionate to wage growth. This trend was seen as early as mid-2023 and was again evident earlier this year, when prices of homes for sale rose by only 0.6% in February compared to the previous month, with the median home price at 2,596 euros per square meter at the end of February.

In this period, house prices rose in 7 capital cities of the districts from January to February, with the city of Évora leading the growth (2.3%), as the index of the real estateagency Idealista shows. In terms of year-on-year change, real estate prices in Portugal rose by 6.2%.

Buying real estate is getting more expensive in 7 major cities.

In February, compared to the previous month, the prices of houses for sale increased in 7 capital cities of the districts, topping the list with Évora (2.3%), Guarda (1.4%) and Coimbra (1.4%). Vicho (1.2%), Braga (1%), Setubal (0.8%) and Porto (0.6%) are also in between house price decreases. At the same time, prices of houses for purchase remained almost stable in Santarenho (0.4%), Lisbon (0.4%), Leiria (0.3%), Castelo Branco (0.2%), Faro (0.1%), Viana do Castelo (-0.3%) and Funchal (-0.5%). On the other hand, house prices for purchase fell in Ponta Delgada (-3.1%), Beja (-1.7%), Aveiro (-1.3%) and Bragança (-0.7%).

Lisbon remains the city where buying a house is the most expensive - 5538 euros per square meter.

Porto (3,517 euros per square meter) and Funchal (3,214 euros per square meter) are in second and third place respectively. They are followed by Faro (2924 euros per square meter), Aveiro (2473 euros per square meter), Setubal (2286 euros per square meter), Évora (2056 euros per square meter), Viana do Castelo (1877 euros per square meter), Coimbra (1864 euros per square meter), Ponto Delgada (1822 euros per square meter), Braga (1794 euros per square meter), Leiria (1447 euros per square meter) and Vichu (1428 euros per square meter). The most economical cities to buy a home are Guarda (795 euros per square meter), Castelo Branco (869 euros per square meter), Beja (913 euros per square meter), Bragança (917 euros per square meter) and Santarém (1213 euros per square meter).

Prices of for-sale homes are rising in 15 districts and islands.

Analyzing districts and Portuguese islands with representative samples, there is an increase in the value of housing for sale in 15 territories, with the most significant price increases in Pico Island (3.3%), Beja (3.1%) and Faial Island (2.6%). They are followed by Évora (1.7%), Terceira Island (1.6%), Porto Santo Island (1.2%), Braga (1%) and Lisbon (1%). With a house price increase of less than 1% are Leiria (0.9%), Vila Real (0.8%), Guarda (0.8%), Setubal (0.8%), Santa Maria Island (0.7%), Porto (0.6%) and Faro (0.6%).

The leaders in the cost of buying a house are Lisbon (3987 euros per square meter).

It is followed by Faro (3303 euros per square meter), Madeira Island (2920 euros per square meter), Porto (2567 euros per square meter), Setubal (2469 euros per square meter), Porto Santo Island (€2,313 per square meter), Aveiro (€1,680 per square meter), São Miguel Island (€1,651 per square meter), Leiria (€1,585 per square meter), Braga (€1,526 per square meter), São Jorge Island (€1,495 per square meter), Santa Maria Island (€1,457 per square meter), Viana do Castelo (€1,432 per square meter), Pico Island (€1,409 per square meter), Coimbra (€1,401 per square meter), Faial Island (€1,375 per square meter), Évora (€1,256 per square meter), Terceira Island (€1,201 per square meter) and Santarém (€1,137 per square meter). The most affordable prices to buy a house are in Portalegre (708 euros per square meter), Guarda (720 euros per square meter), Bragança (858 euros per square meter), Castelo Branco (900 euros per square meter), Vila Real (971 euros per square meter), Vichu (1,081 euros per square meter) and Beja (1,082 euros per square meter).

In February, prices for homes for sale rose in only three regions of the country.

The Lisbon Agglomeration leads the growth (1%), followed by the North (0.7%) and the Algarve (0.6%). In the Center (0.4%), Alentejo (-0.1%), the Autonomous Region of Madeira (-0.1%) and the Autonomous Region of the Azores (-0.2%), prices remained virtually unchanged in the period. The Lisbon agglomeration with 3617 euros per square meter remains the most expensive region to buyreal estate, followed by the Algarve (3303 euros per square meter), the Autonomous Region of Madeira (2910 euros per square meter) and the North (2148 euros per square meter). On the opposite side of the table are the Center (1419 euros per square meter), the Autonomous Region of the Azores (1479 euros per square meter) and the Alentejo (1501 euros per square meter), which are the cheapest regions to buy real estate.

Idealista Real Estate Index. The Idealista Real Estate Index is compiled by analyzing the listing prices (based on constructed square meters) published by advertisers on Idealista. Unusual listings and those with abnormal prices are excluded from the statistics. We also include the category of "individual houses" in our analysis and exclude all listings from our database that have had no user interaction for a certain period of time. The final result is based on the median of all valid listings in each market.

The full report is available at the link:https://www.idealista.pt/media/relatorios-preco-habitacao/venda/.