The Surge in Portuguese Real Estate Prices and Its Impact

2022 was a landmark year for the Portuguese real estate market, with house sale prices witnessing an 18.7% increase, the highest in three decades. This spike in prices has been attributed to a significant reduction in the number of houses available for sale, which hit a 15-year low. The shortage has been especially pronounced in the new homes market, contributing to the price surge. Regions like Funchal and Setúbal experienced the highest increases, while Bragança saw a decline. The average real estate price on popular portals reached 395,458 euros, marking a substantial increase over previous years.

This trend has not only affected buyers but also renters, with average rents climbing significantly, particularly in urban centers like Lisbon, Porto, and Faro. The limited supply, compounded by the demand from foreign investors and the shift of properties to the tourism sector, has put additional pressure on prices, making it increasingly difficult for low-income families to find affordable housing. This situation points to a pressing need for market stabilization and increased supply to meet the growing demand​​.