Portugal’s housing market remains strong. But the rate of house price increases is now moderating, as the COVID-19 pandemic has adversely affected the country’s overall economy.
Property prices in Portugal started to recover in 2014 and have been rising since. House prices rose by 4.5% in 2015, 4.8% in 2016, 4.6% in 2017, 6.1% in 2018 and 8.3% in 2019.
During the year to November 2020, residential property prices in Portugal rose by 6.32% (6.56% in real terms) to a median price of €1,144 per square meter– a sharp slowdown from the previous year’s 11.16% growth, based on figures released by the Instituto Nacional de Estatistica (INE).
- In the North, the median property price rose by 6.54% y-o-y in November 2020 (6.77% in real terms), to €994 per sq. m.
- In the Center, property prices rose by 3.87% y-o-y in November 2020 (4.1% in real terms), to €833 per sq. m.
- In Alentejo, property prices rose by a modest 2.84% (3.07% in real terms) y-o-y to €833 per sq. m.
- In Algarve, property prices rose strongly by 7.28% (7.52% in real terms) y-o-y to €1,562 per sq. m.
- In the Azores, property prices increased 3.41% (3.64% in real terms) y-o-y to €940 per sq. m.
- In Madeira, the median property price rose by 2.55% (2.77% in real terms) y-o-y to €1,168 per sq. m. in November 2020
There are no restrictions on foreign property ownership in Portugal and transaction costs are generally low.
Portugal grants a 5-year residency permit to non-EU citizens who buy a minimum of €500,000 worth of property, allowing holders to work or study, and travel to Schengen countries. They can apply for permanent residency after five years.