Luxury Real Estate in Algarve Regions Tops Square Meter Price Tags
According to the Engel & Völkers Market Report 2024-2025, the housing market in Portugal is on an upward trajectory, with a projected continuation of the growth trend into 2025. The report reveals a 14.5% increase in the number of housing transactions in 2024 compared to the previous year, signifying a robust market activity.
Price trends indicate an upward movement in average home prices across many regions analysed by Engel & Völkers. Notable rises were observed in the Faro region (around 44%), Comporta (27%), and Albufeira (about 20%). However, some regions like Lisbon, Oeiras, Cascais, Estoril, Lagos, Vilamoura, and Tavira experienced slight decreases in average prices compared to the previous year.
Major cities like Lisbon and Porto are expected to continue experiencing price growth, supported by their recovery from past corrections and sustained demand. Porto, in particular, is forecast to see an approximately 8% price increase in 2025, driven by limited supply in prime areas and urban renewal projects, with no significant price corrections anticipated.
The report also highlights the Minho region as having the highest percentage of foreign investment, representing 95% of its operations. The largest investors in this region are the English, Germans, and Swiss. On the other hand, Vila Nova de Gaia has the lowest percentage of foreign investment.
In the rental market, Vila Nova de Gaia, Lisbon, and Setúbal saw the greatest increases in terms of rental contracts. The regions of Lisbon, Cascais, and Porto record the highest price per square meter in the rental market, reaching 15.93 euros/m2, 15.31 euros/m2, and 12.58 euros/m2, respectively. Guimarães is the region analysed that records the lowest price per square metre, around 1,700 euros/m2, and the lowest price per square meter in the rental market, where the price is around 6 euros/m2.
Engel & Völkers also noted an increase in the average price of homes sold in all regions analysed, except for Lisbon and Oeiras, Cascais and Estoril, Lagos, Vilamoura, and Tavira regions. Quinta do Lago is the region analysed that records the highest price per square metre, reaching 12,800 euros/m2.
In conclusion, the Engel & Völkers Market Report 2024-2025 projects a continuing upward trend in Portugal’s housing market for 2025, characterised by growing demand, rising prices in most regions, and strong fundamentals especially in areas like the Algarve, Porto, and Lisbon, although certain specific hotspots may see slight price adjustments downward.
- The Engel & Völkers Market Report 2024-2025 suggest a prospective 8% price increase in Porto's real estate market in 2025, attributed to limited supply in prime areas and urban renewal projects.
- The Minho region, according to the report, attracts the highest percentage of foreign investment, with the English, Germans, and Swiss being the largest investors in this region.
- In the rental market, Vila Nova de Gaia, Lisbon, and Setúbal experiencing the greatest increases in rental contracts, while regions like Guimarães record the lowest price per square meter, around 6 euros/m2.
