Portugal's property market shows little sign of losing momentum, with figures indicating the country is continuing to outperform the EU, UK and US, according to the newly published Property Market-Index Hotspots Report 2026-2027.
The report finds that Portugal's median property prices are up 17.9% year-on-year, driven by demand from international buyers that shows no sign of easing.
Property Market-Index, a global luxury real estate research firm behind the report, states that Portugal's property market remains one of the strongest performers in Europe as it heads into 2026 and 2027.
According to the report's figures, median property prices based on bank valuations reached €2,025 per square metre in October, a 17.9% increase on the same month last year. That is more than three times the EU average of around 5% recorded for 2025.
Regional performance
The Algarve is said to be leading regional growth, with average prices reaching €3,467 per square metre in 2025 — a 9.3% rise on the previous year. In Lisbon, some of the city's most prestigious districts, including Avenida da Liberdade, Lapa and Príncipe Real, are reported to be commanding new-build prices of up to €12,000 per square metre.
Supply shortage cited as key driver
Amanda Collison, spokesperson for Property Market-Index, said the gap between supply and demand remains the central factor behind rising prices:
"New-build completions have averaged just around 21,000 homes per year between 2020 and 2024, compared with roughly 104,000 per year in the early 2000s. Yet demand has far outpaced this limited supply, with around ten properties sold for every new home built in 2024.
“That structural shortage is what continues to push prices upward, particularly in the country's most sought-after regions, and we expect this trend to persist through 2026 and 2027."
Foreign investment on the rise
The report also points to continued growth in international capital flowing into Portugal.
Total real estate investment volume in the country is reported to have risen by 51% in 2024 compared with the previous year, with foreign investors said to account for 81% of that activity.
Top-ranked hotspots for 2026-2027
Property Market-Index rates the country's leading locations against eight weighted criteria, including regeneration investment, growth trends, land availability and infrastructure, with an index score above 100 denoting the strongest performers. Per the report, the top-ranked hotspots for 2026-2027 are:
Quinta do Lago, Algarve – 194- Cascais, near Lisbon – 191
- Vale do Lobo, Algarve – 189
- Comporta, near Lisbon – 186
- Ferragudo/Carvoeiro, Algarve – 183
Full rankings are available within the report.
Emerging areas of interest
Beyond the established Algarve and Lisbon markets, the report highlights growing momentum in Alentejo's coastal areas, including Comporta, Tróia and Melides, where capital growth reportedly reached as high as 18% in 2025. Continued interest in northern locations around Porto and Braga is also noted.
With demand said to still significantly outstrip new supply, Property Market-Index forecasts that overall prices across the country's leading hotspots could rise by a further 5.8% in 2026 — which, according to the report, would mark Portugal's third consecutive year as one of the strongest-performing property markets in Europe.
International interest continues to grow
Steve Philp, director at Portugal Pathways, notes a notable rise in international enquiries, particularly from the UK, US, South Africa, and Brazil.
"Access to the luxury segment can be challenging, as many premium properties are transacted off-market.
"Through our network of over 250 architects, developers, and industry professionals, Portugal Pathways provides access to exclusive off-plan and off-market opportunities that are not widely available."
The full Property Market-Index Hotspots Report 2026-2027 can be accessed here.
