Portuguese housing market keeps on booming because flourishing tourism industry

The Portuguese real estate market has demonstrated impressive resilience, closing out 2024 on a strong note with optimistic forecasts for 2025. According to the December 2024 Portuguese Housing Market Survey by RICS and Confidencial Imobiliário, property prices have risen by 11% over the past year, while sales volumes have surged by 27%, highlighting the sector’s solid performance.

Ricardo Guimarães, Director of Confidencial Imobiliário, attributes this surge in demand to declining interest rates and heightened buyer enthusiasm. He points out that both families and investors have swiftly taken advantage of shifting market dynamics, leading to a significant uptick in transaction activity.

The Algarve, a prime destination for international buyers, has experienced particularly strong demand. Kronos Homes has witnessed this trend firsthand, with increasing interest in properties throughout the region. Alda Filipe, the company’s first female Partner in Portugal, notes that buyers from across the globe are eagerly acquiring a variety of properties, from beachfront apartments to expansive villas. “Off-plan homes are especially popular, which is why we’re investing over 200 million euros in new luxury developments in Vale do Lobo, one of the Algarve’s most prestigious locations,” Filipe explains.

While international buyers continue to drive interest in the Algarve, the Portuguese housing market is also benefiting from steady domestic demand. Tarrant Parsons, Head of Market Analytics at RICS, highlights Portugal’s robust economic performance—fueled by domestic growth and a flourishing tourism industry—as a key factor positioning the country ahead of the Eurozone in 2025. “With economic challenges easing and interest rates expected to decline, Portugal is well-placed to sustain its strong market performance,” says Parsons.

The latest survey also indicates a rise in buyer interest, with new inquiries increasing by 6% in December 2024. Looking ahead, both sales and property prices are projected to remain on an upward trajectory in early 2025. Experts remain optimistic that demand will remain strong across all property types in the Algarve, ensuring another prosperous year for Portugal’s real estate sector.

“Prospects for 2025 are extremely positive,” says Alda Filipe. “Demand remains widespread across all property segments in the Algarve, and we anticipate continued growth in the market.”

As momentum builds, Portugal’s attractiveness to both local and international buyers is set to drive further expansion, making 2025 an exciting year for the housing industry.