Home Buying Costs Surge Again: Prices Rise 9.8% in a Year

The real estate market in Portugal is experiencing a significant shift, with home prices rising by 9.8% over the past year according to a report by Idealista property experts. This increase is attributed to a combination of lower mortgage interest rates, increased savings among families, and heightened interest from foreign investors. However, the persistent scarcity of housing supply continues to drive prices upward, making home buying more expensive than ever..

Price Increases Across District Capitals

In the last year, every district capital in Portugal has witnessed a rise in home prices. The ten areas with the most notable increases were:

Leiria: 17.4%
Ponta Delgada: 16.8%
Portalegre: 16.3%
Funchal: 13.1%
Viseu: 10.7%
Braga: 10.3%
Évora: 10.1%
Santarém: 9.4%
Castelo Branco: 9%
Bragança: 8.5%

Lisbon remains the most expensive city for home purchases, with prices reaching €5,674 per square meter, followed by Porto at €3,667 and Funchal at €3,473.

Regional Price Trends

Analyzing the data by region, all areas of Portugal have seen price increases over the past year. The most significant rises occurred in:

Madeira: 16.6%
Azores: 16%
North: 12.5%
Algarve: 10.1%
Central Region: 9.4%
Lisbon Metropolitan Area: 9.1%
Alentejo: 3%

The Lisbon Metropolitan Area continues to be the priciest region for home purchases, with an average cost of €3,799 per square meter.

The upward trend in home prices in Portugal reflects a complex interplay of economic factors, including supply and demand dynamics. As the market continues to evolve, potential buyers may need to act quickly to secure properties before prices rise further. With the current median price at €2,735 per square meter, the dream of homeownership is becoming increasingly challenging for many.