Housing prices in Portugal have dropped by 1.3%, including in Lisbon and Porto.

The purchase of real estate in Portugal is showing a trend of decline against the backdrop of high housing prices, rising mortgage interest rates, and decreasing purchasing power of the population. This cooling of demand is impacting housing prices. At the end of April, the National Institute of Statistics (INE) reported that the average price of all sold real estate in the fourth quarter of 2023 was €1,619 per square meter, which is 7.9% higher than the same period last year. However, compared to the previous quarter, housing prices in Portugal have decreased by 1.3%, and this decline is observed in 14 out of the 24 most populated municipalities in the country, including Lisbon and Porto.

According to INE, the average price of family homes in Portugal reached €1,619 per square meter in the fourth quarter of 2023, reflecting an annual growth of 7.9%. However, this change is significantly lower compared to the previous quarter, which saw a growth of 10%. When analyzing prices compared to the third quarter of 2023, there is an actual decrease, as the average price of €1,610 per square meter in the fourth quarter of 2023 is 1.3% lower than in the previous period, marking the end of a prolonged growth that began in the fourth quarter of 2022.

Among foreign buyers in Portugal, families residing in the country also purchased homes at lower prices from October to December 2023 - the average price was €1,584 per square meter, which is 1.1% lower compared to the previous quarter. Foreigners are also spending less on housing: the average price of properties sold to them was €2,241 per square meter, which is 2.4% lower than three months ago. This trend was particularly noticeable among those living outside the European Union, where prices fell by 9.7%, while homes purchased by European Union citizens were 3.1% more expensive.

Compared to the same period last year, the average cost of housing purchased by local residents has increased by 8%. At the same time, foreign buyers remain 41% higher in their price preferences compared to residents of Portugal.

Housing prices by municipalities

By the end of 2023, 14 out of 24 municipalities with populations over 100,000 have reported a decline in housing prices.

• Matoshinyush (-14.4%)
• Porto (-8.7%)
• Funchal (-8.4%)
• Barcelos (-8.1%)

The minimum level of decline was recorded in Vila Nova de Gaia (-0.8%) and Lisbon (-1.9%).

In annual terms, 18 out of 24 municipalities with populations over 100,000 are experiencing a slowdown in housing price growth, including all municipalities in Greater Lisbon and the Setúbal Peninsula, except for Seixal, as well as in the Portuguese metropolitan area, except for Maia. In Porto, it has been noted that the rate of housing price growth has slowed down (a decrease of 11.9 percentage points), similarly in Lisbon (a decrease of 5.7 percentage points).

Nevertheless, in the remaining six largest municipalities, there is an acceleration in housing price growth, with the following being highlighted:

• Maya (an increase of 7.8 percentage points)
• Vila Nova de Famalicão (an increase of 6.5 percentage points)

Oeyrash is the only municipality where a decrease in the median housing price was recorded compared to the same quarter last year, with a drop of 2.8%.

Highest and lowest housing prices

For quite expected reasons, municipalities:

• Cascais (€4,176/m²)
• Lisbon (€4,086/m²)
• Oeiras (3,096 euros/m2)

have the highest housing prices in the country. Meanwhile, among the most densely populated municipalities with the lowest housing prices are:

• Barcelos (€1,129/m²)
• Gimaraïns (€1,233/m²)
• Santa Maria da Feira (€1,252/m²)

Housing prices by subregions

Housing prices are decreasing in 13 subregions of the country. If we consider the 26 subregions of Portugal, a decline in housing prices has also been recorded in 13 of them between the last and the previous quarter. The most significant drop is observed in:

• Madeira (-11.3%)
• Alto Tâmega and Barroso (-7.7%)
• Portuguese metropolis (-6.6%)

In Greater Lisbon, the rise in prices is also slowing down, but to a lesser extent (-2.4%).

On the other hand, in nine subregions during the same period, there is an increase in housing prices, while the three subregions of Alentejo show the highest upward values. In the Coimbra region and in Aveiro, prices remain virtually unchanged.

In annual terms, the average price of housing has increased in 23 out of 26 subregions, with the largest increase observed in the West (16.7%), reports INE. The three regions where housing prices have fallen are:

• Doru (-15%)
• Alto Tamega (-3.9%)
• Beira-Baixa (-1.2%)

According to the current report, in subregions such as:

• Greater Lisbon (€2,728/m²)
• Algarve (€2,623/m²)
• Setúbal Peninsula (€1,952/m²)
• autonomous region of Madeira (€1,869/m²)
• Portuguese metropolis (1,776 euros/m2)
• coastal Alentejo (€1,674/m²)

the level of housing prices has been marked as exceeding the national average indicators. It should also be noted that, as in previous quarters,Alto AlentejoThe subregion with the lowest median housing sale price (520 euros/m²) remains.