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Portugal’s house price history before the pandemic

The Covid-19 pandemic has put all activities from living, working, studying, traveling, production, business to investment into a halt. Hope for recovery are something that every nation and region has in common, so it is difficult to predict anything for the near future. However, in terms of long-term investment strategy, we should pay attention to the long-term real estate cycle and the trends in the market before the pandemic to have an objective overview to prepare for the post pandemic recovery and growth.

This article analyzes Portuguese Real Estate market as of November 2019

In November 2019, Portugal’s housing prices continue to rise strongly, fuelled by low interest rates as well as improved economic conditions.


Property prices in Portugal soared by almost 8% (7.7% in real terms) y-o-y in November 2019, to an average price of €1,312 (US$1,461) per square metre (sq. m.), based on figures released by the InstitutoNacional de Estatistica (INE).


House 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 and 6.1% in 2018.


In Lisbon metropolitan area, property prices were up by 9.5% (9.2% in real terms) in November 2019 from a year earlier, to an average of €1,631 (US$1,816) per sq. m.


House prices rose in 23 of the country’s 24 urban areas. Sintra recorded the highest increase of 18.3% during the year to November 2019, followed by Gondomar (16.7%), Vila Franca de Xira (15.5%), Vila Nova de Gaia (15.3%), Amadora (14.8%), Matosinhos (13.8%), Braga (12.7%), Funchal(11.3%), Almada (11.2%), Odivelas(10.5%), Seixal (10.4%), and Maia (10%). Strong house price rises were also registered in Vila Nova de Famalicão (9.8%), Coimbra (9.2%), Guimarães (8.5%),Setúbal (7.8%), Barcelos(6.6%), Oeiras(6.3%) and Loures (6.1%).


Modest to minimal house price increases were seen in Cascais (5.6%), Santa Maria da Feira (4.5%), Porto (3.3%), and Lisboa (0.5%). Only Leiria saw a house price decline of 2.5% during the year to November 2019.


By property type:

  • Flats prices rose strongly by 9.8% (9.5% in real terms) y-o-y in November 2019, to an average of €1,402 (US$1,561) per sq. m.

  • Villa prices rose by 4.2% (3.9% in real terms) during the year to November 2019, to an average of €1,162 (US$1,294) per sq. m.

Demand remains healthy. During the first three quarters of 2019, the total value of housing transactions rose by 4.3% y-o-y to €18.65 billion (US$20.82 billion) while the number of transactions was steady at 132,246 units, according to INE. Clearly the new wealth tax introduced in 2017, applicable to higher-valued properties, has in fact had a negligible impact on the luxury housing market.


The Portuguese housing market is expected to remain buoyant this year, with Moody’s Investors Service predicting house price increases of around 4% - a slowdown from last year’s strong price growth but still one of the biggest increases in the region. “A sharp rise in the price of housing, although lower than in recent years,” said Moody’s.

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.


The Portuguese economy expanded by a modest 2% in 2019, after annual rises of 2.4% in 2018, 3.5% in 2017, 2% in 2016, 1.8% in 2015, and 0.8% in 2014, according to the European Commission. The economy is expected to grow by 1.7% annually in the next two years.


House prices above pre-recession levels


As of November 2019, Portugal´s nationwide house prices were 11.4% above their previous nominal peak, seen in May 2010.However, national house prices are still below their previous inflation-adjusted peak, which occurred in 2000.

The housing market began to recover in Q4 2014, after 13 consecutive quarters of y-o-y house price declines.

By region, Norte’s house prices are now almost 19% above the previous peak while Algarve’s prices are up 14.7%. House prices in AM Lisbon are 12.6% up, and in Centro 6.8% up. In contrast, Alentejo’s house prices are still 0.3% down from the peak.

In the autonomous regions of Madeira and Azores Islands, house prices remain 1.2% and 1.1% down from their peak, respectively.

The house price boom that swept most of Europe and the developed world from the mid-1990s to 2006 completely by-passed Portugal, except in the Algarve:

  • 2003 - 2004: house prices rose by an average of 6.2% y-o-y (3.3% in real terms);

  • 2005 - 2007: prices rose by an average of 1.25% (-1.3% in real terms);

  • 2008: prices fell by an average of 4.7% (-7.1% in real terms);

  • 2009: prices fell by an average of 2.6% (-1.8% in real terms);

  • 2010 - 2012: house prices fell by an average of 3.1% (-5.5% in real terms);

  • 2013-2014: house prices dropped by an average of 1.5% (-1.5% in real terms);

  • 2015-2017: house prices rose by an annual average of 4.6% (3.7% in real ter