Portugal Real Estate Market Update 2024 H2 and 2025 H1

After years of unheard and excessive year-over-year growth, the Portuguese real estate market is starting to shows signs of stabilisation due to several national and international causes.

Slowing growth

All relevant market indicators are showing that the market is slowing down compared to previous years. External factors such as rising interest rates, rising costs of living and geopolitical uncertainty contribute to this trend.

Nevertheless, the market is expected to remain positive with a stable level in average property prices, especially in areas with high demand and limited supply such as the Algarve. With the prime regions Albufeira, Vilamoura and Loulé. Especially in the Algarve we are seeing a bigger appreciation of high-end properties outside the numerous resorts. People are looking for homes in the reel Algerian society in stead of the fake created and cultivated communities. Especially the international growing concerns with water management makes people choose to move away from the water consuming golf courses and resorts.

Demand stays higher than market stock

The demand for housing is expected to remain strong and even grow more, driven by factors such as demographics, the need for new homes and foreign investment. The growing demand from the US and Canada are still remarkable and once Faro airport opens up to the US we will see yet another influx of wealthy Americans coming to enjoy the benefits of living in nPortugal.

On the other hand, the market stock stays behind due to rising construction costs and local bureaucracy that makes the time to develop a single house extend 2 years and in some areas even 3 years.

The demand for high-class properties is expected to remain strong, attracting national and international investors. Factors such as quality of life, mild climate and tax benefits for non-habitual residents contribute to this trend.

Demand for commercial and logistical (smaller) spaces is expected to increase, driven by the growth of e-commerce and the expansion of logistics activity. Areas with good accessibility and infrastructure will be the most valued.

The tourism sector as the corner stone of the Portuguese economy, is expected to grow even more. Where its traditional peaks are spring and summer, we will see a growing tourism industrie in the ´low´ season. In a few years time the Algarve and Lisbon will be on a high level of Tourism all year long.

Keep an eye on Sustainability

Sustainability is going to be more and more of a crucial factor in real estate purchasing and investment decisions. Properties with efficient energy certification, the use of ecological materials and innovative solutions for saving energy and water will be increasingly sought after. It will pay off to invest in ecological and sustainable solutions for your villa in the long run.

Technology

Even now we are all over Covid bringing us traveling restrictions, the techology we were forced to use in those dark times are still in place and form a good bases on introducing foreign potential buyers to your property.

The use of digital tools and technological solutions in the real estate market is expected to intensify. Online platforms, virtual reality and artificial intelligence will be increasingly used for property research, virtual visits, property management and decision making.

Challenges

• Shortage of product
• High demand areas will suffer even more from shortage
• High construction costs
• High plot prices
• Sellers not willing to be ´flexible´on pricing.

Oportunities

• Due to shortage it will stay a sellers market
• Sustainability
• Influx of Northern American buyers

The Portuguese real estate market in 2024 and 2025 will be marked by little of a moderate growth, growing focus on sustainability, more adoption of technology and innovation, and the need to face challenges such as supply shortages and construction costs.

Are you interested to buy a property, take a look at our available properties!