The median price of family homes in Portugal rose to a sky-high €2,076 per square metre in the past year, according to a new official report, marking a 16.8% increase on the previous year, with the Algarve remaining the country's second most expensive region for residential property.
Last year, house prices remained above the national median in Greater Lisbon (€3,439 per square metre), the Algarve (€3,139), the Setúbal Peninsula (€2,596), the Autonomous Region of Madeira (€2,500) and the Porto Metropolitan Area (€2,305), according to the the newly released 2025 Construction and Housing Statistics.
Despite being one of Portugal's most expensive housing markets, wages in the Algarve remain relatively low. The region's economy relies heavily on tourism and hospitality, sectors characterised by seasonal employment and generally lower pay than the national average. As a result, many households are forced to spend a significant share of their income on housing, making it increasingly difficult for young people, families, and essential workers to afford to live in the region.
Of Portugal's 308 municipalities, 56 recorded median house prices above the national average. These were concentrated largely in Greater Lisbon, where all nine municipalities exceeded the national figure, the Setúbal Peninsula (all nine municipalities), the Algarve (14 of 16 municipalities) and the Porto Metropolitan Area (nine of 17).
Lisbon remained the country's most expensive municipality, with a median house price of €4,875 per square metre. It was followed by Cascais (€4,550), Oeiras (€4,187), Loulé (€3,993) and Lagos (€3,801), all of which recorded median prices above €3,500 per square metre.
Meanwhile, the median rent for the 149,628 new residential tenancy agreements signed last year increased by 9.7% year on year, reaching €9.29 per square metre. In the Algarve, the median stood at €10.53 per square metre.
Rental prices remained above the national median in Greater Lisbon (€14.19 per square metre), the Autonomous Region of Madeira (€11.33), the Setúbal Peninsula (€11.05), the Algarve (€10.53) and the Porto Metropolitan Area (€10.17).
Greater Lisbon accounted for more than a quarter of all new tenancy agreements, with 41,593 contracts signed. Together, Greater Lisbon and the Porto Metropolitan Area represented 44.8% of all new residential rental contracts nationwide. They were followed by the Setúbal Peninsula, which accounted for 7.3% of new agreements, and the Algarve, with 5.6%.
Across Portugal's 308 municipalities, 36 recorded median rents above the national figure. Lisbon topped the rankings at €16.88 per square metre, followed by Cascais (€16.20), and Oeiras (€15.03).
Source: LUSA
Photo credit: Reuters / Pedro Nunes
