Foreigners spend 63% more on purchasing real estate in Portugal than locals do.

Portugal continues to attract a large number of foreigners who, in turn, invest in real estate, thanks to the country's climate, safety, beaches, and much more. As a result, the demand for homes for purchase continues to exceed the existing supply in the housing market. This imbalance is the reason for the constant rise in housing prices in the country, quarter after quarter. All households are buying more expensive homes, and in this situation, foreigners end up spending 63% more than Portuguese citizens. But where are the Portuguese and foreigners buying more expensive homes? And how much have prices increased? Idealist/news delved into the data from the National Institute of Statistics (INE) and explains everything.

Residents and non-residents, home buyers in Portugal

All home buyers, in general, pay more for the houses they purchase in Portugal.

• Residents in Portugal (buyers with a tax address in Portugal) paid an average of 1,372 euros per square meter (euros/m2) for a home in the last 12 months ending in June, which is 14% more than a year ago. This is also 4% more than what they spent in the same period ending in the first quarter of this year.
• Non-residents in Portugal (buyers with a tax address abroad, in the European Union and elsewhere): buying a house cost €2,234/m2 in the last 12 months ending in the second quarter of 2022, 19% more than a year ago. And compared to the same period ending in the first quarter of 2022, houses in Portugal were 3% more expensive for foreigners.

This means

Foreigners are buying homes in Portugal that are, on average, 63% more expensive than those purchased by residents. In other words, a foreign family buys a 100 square meter house for 223,000 euros, while a Portuguese family buys a house of the same size for 137,000 euros (a difference of 86,000 euros).

Households living in Portugal: where do they buy the most expensive homes?

Buyers with a tax address pay higher prices for homes in all 24 municipalities with more than 100,000 residents, according to INE data. The largest year-on-year increases in median prices for sold homes were recorded in Gondomar (+17%), Seixal, Vila Nova de Gaia, Sintra, and Braga (all with a 15% increase). The least significant price increases were noted in Guimarães (+7%) and Odivelas (+8%).

Foreign buyers: where have real estate prices risen the most in Portugal?

Foreigners buying real estate in Portugal generally pay more on average. This is because the prices of homes purchased by foreign buyers have increased in almost all municipalities with more than 100,000 residents - the only exception being the municipality of Seixal, where the median values fell by 2% compared to last year.