Portugal House Prices 2026: Up 16.5% as Sales Fall Again

Portugal house prices in 2026: The headline numbers

INE's House Price Index, published on 22 September 2026, confirms that property prices rose by 16.5% between the second quarter of 2025 and the second quarter of 2026.

Existing homes increased in price by 18.0%, while newly built homes rose by 12.3%. Prices also increased by 3.6% compared with the first three months of 2026.

However, the annual growth rate has now slowed for two consecutive quarters, having peaked at 18.9% in the final quarter of 2025.

How house price growth has changed

Source: INE House Price Index. Each figure compares prices with the corresponding quarter one year earlier.

Portugal's increase was also the highest in the EU, according to Eurostat's figures published on 1 October 2026. Bulgaria followed at 15.5% and Lithuania at 14.3%. The EU average was just 4.7%, while the euro area averaged 4.0%.

Fewer homes sold, but more money spent

INE recorded 40,142 property transactions during the second quarter of 2026, a decline of 6.4% compared with the same quarter in 2025.

This marked the third consecutive quarter of annual declines in property sales:

• Q4 2025: Sales fell by 4.7%.
• Q1 2026: Sales fell by 8.7%.
• Q2 2026: Sales fell by 6.4%.

Sales did recover by 6.4% compared with the immediately preceding quarter. That is an important distinction: the market was weaker than a year earlier, but activity improved from the particularly slow start to 2026.

Despite fewer transactions, their combined value reached approximately €10.7 billion, an increase of 4.2% year on year.

Dividing that value by the number of transactions gives roughly €266,500 per property. This is a calculated average, not a separate official INE average price measure. It can also be influenced by the mix of properties sold.

The overall picture is therefore not of a housing market experiencing falling prices. It is a market where fewer transactions are taking place at substantially higher prices.

Where are house prices highest in Portugal?

INE's more detailed local house price statistics, published on 23 October 2026, reveal substantial differences between regions.

The national median transaction price reached €2,445 per square metre in the second quarter, an increase of 18.4% from a year earlier.

This local statistics dataset covers 37,854 property sales and uses a different statistical methodology from the House Price Index transaction totals. Its 18.4% change in median price should not be confused with the 16.5% increase in the national House Price Index.

Median property prices by region, Q2 2026

Source: INE Local House Price Statistics, second quarter of 2026. Figures are median prices for completed transactions, not advertised asking prices.

Greater Lisbon remains considerably more expensive than much of the country. Within individual municipalities, Lisbon recorded a median of €5,299 per square metre, Cascais €5,200 and Oeiras €4,704.

For someone looking to relocate, these figures demonstrate why choosing a region can matter as much as choosing a particular property.

A 100 m² home priced at the regional median would correspond to approximately €403,000 in Greater Lisbon, compared with €157,600 in the Coimbra region. These are simple illustrations, not quotations for equivalent homes. Property type, condition, age, location and usable floor area can all produce substantial differences.

Where are prices rising fastest?

House prices increased across all 26 statistical sub-regions in the local INE dataset.

Some of the fastest annual increases were outside the areas traditionally associated with expensive international property purchases:

• Médio Tejo: +25.4%.
• Oeste: +24.0%.
• Lezíria do Tejo: +23.9%.
• Azores: +23.9%.
• Setúbal Peninsula: +22.2%.

At the other end of the scale, Terras de Trás-os-Montes recorded an increase of 5.2%.

These differences matter for buyers searching beyond Lisbon, Porto and the Algarve. Some less expensive regions are recording particularly rapid increases, although their absolute prices may remain considerably lower.

Where are property sales falling most?

While property prices rose nationwide, the number of homes sold declined in every NUTS II region in the second quarter of 2026.

The largest annual falls were recorded in:

• Madeira: 15.2% fewer transactions.
• Algarve: 12.4% fewer transactions.
• Greater Lisbon: approximately 7.4% fewer transactions.
• Norte: approximately 6.4% fewer transactions.
• Centro: approximately 4.3% fewer transactions.

The smallest declines were in Alentejo, at 0.8%, and the Setúbal Peninsula, at 2.1%. The Greater Lisbon, Norte and Centro percentages are calculated from INE's regional transaction tables.

The value of completed property sales actually fell in only two regions: Algarve, down 4.5%, and Madeira, down 2.8%. It rose by 20.2% in Alentejo and 15.2% in the Setúbal Peninsula.

Madeira and the Algarve therefore stand out because both their transaction numbers and total transaction values declined. Nevertheless, this does not establish that individual homes have become cheaper.

Foreign and non-resident buyers are purchasing fewer homes

One of the most interesting developments is the decline in purchases by people whose tax residence is outside Portugal.

According to INE, buyers with foreign tax residence purchased 1,890 homes during Q2 2026, representing just 4.7% of all transactions.

That was a fall of 10.3% from the same quarter in 2025, following an even larger annual decline of 15.6% in Q1 2026.

Of those purchases, 946 were made by buyers resident for tax purposes elsewhere in the EU, a fall of 14.9%, while 944 were made by buyers tax-resident in countries outside the EU, a fall of 5.1%.

By comparison, buyers tax-resident in Portugal completed 38,252 transactions, representing 95.3% of the market, with their purchases down by 6.2% year on year.

Important: These statistics distinguish buyers by tax residence, not nationality. A foreign citizen living and paying tax in Portugal is counted among Portuguese tax-resident buyers.

Are non-resident buyers paying more?

In aggregate, yes. INE's local statistics show that buyers with foreign tax residence paid a median of €3,182 per square metre, compared with €2,421 among buyers tax-resident in Portugal.

That is a difference of approximately 31%.

The difference was particularly striking in Greater Lisbon, where the respective medians were €5,878 and €4,000 per square metre. In the Porto Metropolitan Area they were €3,640 and €2,648, while in the Algarve they were €4,143 and €3,368.

The separate national transaction statistics also show that non-resident buyers spent approximately €796 million on 1,890 homes. That works out at roughly €421,000 per purchase, compared with approximately €266,500 across the market as a whole.

These figures do not prove that non-residents are paying more for identical properties. They may reflect differences in location, property size, quality and the type of homes purchased.

For relocation buyers, the practical lesson is to investigate comparable completed sales rather than relying exclusively on advertised prices or assumptions about what overseas buyers normally pay.

Why are house prices rising while sales are falling?

It may seem contradictory, but fewer property transactions do not automatically create lower prices. Portugal's housing market is affected by several forces operating at the same time.

1. Portugal still has a housing supply problem

Insufficient housing supply remains an important explanation for rising prices. The shortage is especially visible in major employment centres and popular coastal areas, where suitable properties may attract interest despite high prices.

INE construction statistics for Q2 2026 provide a mixed picture. The number of licensed buildings fell by 7.1% year on year, while completed buildings declined by 4.2%. However, dwellings licensed in new construction rose by 10.8%, and completed dwellings increased by 11.6%.

This distinction matters because apartment buildings can contain many individual homes. The figures do not support a simple claim that all residential construction activity is falling.

A study published in the journal Economies in 2026, with the participation of a lecturer from the Instituto Superior Miguel Torga, examined the period from 2009 to 2023. It found that GDP growth was the strongest short-run statistical driver of mortgage-financed housing transaction values, with mortgage lending conditions and household financial stress also playing important roles. The authors discussed limited housing supply as a structural problem. Their model found no statistically significant independent short-run effect of immigration flows on mortgage-financed transaction values, although this does not rule out effects on rents or particular local property markets.

The supply problem has developed over many years and is unlikely to be resolved by one quarter of additional construction.

2. Affordability and mortgage conditions are restricting buyers

There is also a growing gap between property prices and what households can afford.

On 1 August 2026, Banco de Portugal introduced tighter macroprudential credit rules. As a general guideline, borrowers' monthly debt repayments should not exceed 45% of net income, reduced from the previous 50% limit. Affordability assessments also account for interest-rate stress.

The main loan-to-value limits remain 90% for a primary permanent residence and 80% for other purposes, subject to applicable exceptions. The maximum recommended mortgage term is now 40 years for borrowers aged 35 or under and 35 years for older borrowers.

Higher borrowing costs add further pressure. The European Central Bank increased its key interest rates by 0.25 percentage points in June and again in September 2026, bringing its deposit facility rate to 2.50%.

The 12-month Euribor was around 3.2% in mid-October 2026 (3.217% on 15 October). INE's September 2026 release reported that mortgage contracts concluded in the three months from June to August 2026 carried an average interest rate of 2.959%, while their average monthly instalment was €757, up 13.7% from a year earlier.

These conditions can reduce the number of buyers able to complete a purchase, even while prices remain elevated.

3. Domestic demand is still receiving support

Portugal has also introduced measures intended to help younger residents purchase their first home.

Eligible buyers aged 35 or under can benefit from a state guarantee that may facilitate financing of up to 100% of the eligible transaction value for a first permanent home priced at no more than €450,000.

The IMT Jovem scheme also provides property transfer tax benefits for qualifying younger first-home buyers.

These programmes may support purchasing activity among eligible domestic households. Banco de Portugal reported that loans benefiting from the public guarantee represented approximately 20% of the value of new mortgage lending granted in 2025.

Mortgage lending has remained substantial, with a Millennium bcp market note reporting that the value of new mortgage operations in Q2 2026 was 22% higher than a year earlier.

Strong demand from some buyers can therefore coexist with increasing affordability problems for others.

4. The international buyer market has changed

Portugal's international property market is also operating under different rules from those in place a few years ago.

The real-estate investment routes to the Golden Visa ended in October 2023. The former Non-Habitual Resident tax regime also closed to new entrants, subject to transitional provisions, and its IFICI replacement is more narrowly focused on qualifying activities rather than pension income.

These changes have altered some of the incentives previously available to overseas buyers. However, it would be misleading to attribute the current decline in transactions to any single reform.

Another change arrived on 25 May 2026, when a new 7.5% IMT rate began applying to certain residential purchases by non-residents, subject to statutory exceptions and refund provisions. Q2 2026 was the first quarter partly affected by the rule, but no official source establishes that it caused the decline in non-resident purchases. Those purchases had already fallen by 15.6% year on year in Q1. Buyers planning to become Portuguese tax residents should read our separate guide to the 7.5% IMT rule and how a refund may be available.

What is happening to rents in Portugal?

Purchasing a property is only part of the picture. Many people relocating to Portugal begin by renting, particularly while arranging their residence visa, learning about different neighbourhoods or waiting for a suitable home to become available.

Unfortunately, the rental market is also becoming more expensive.

INE reported that the median rent on new residential leases reached €10.17 per square metre during Q2 2026, an annual increase of 10.2%.

There were 35,407 new leases, an increase of just 0.4% from the same period a year earlier.

Within Lisbon municipality itself, the median reached €17.79 per square metre.

These are figures for new leases, not the rents paid across all existing contracts. A tenant who signed a lease several years ago may pay considerably less.

For newcomers, this means the cost of renting while searching for a property should be included in the relocation budget. Our guides explain how to rent without a Portuguese guarantor and what accommodation evidence may be needed for a visa.

Bank property valuations reach another high

The latest banking statistics provide another indication that the market remains expensive.

INE's September 2026 bank appraisal figures, published on 27 October, show that the national median valuation reached €2,278 per square metre, a rise of 14.2% compared with September 2025.

That was the highest level in the series, which began in 2011.

Apartments recorded a median valuation of €2,662 per square metre, compared with €1,621 for houses. Greater Lisbon reached €3,452, the Algarve €2,953, the Setúbal Peninsula €2,845 and Madeira €2,642.

Bank valuations should not be confused with completed sale prices or advertised asking prices. They serve a different purpose and cover properties assessed in connection with financing.

Nevertheless, the September figures reinforce the broader evidence that housing values remained elevated after the second quarter.

What does this mean if you are moving to Portugal?

For prospective residents applying through the D7 visa, D8 Digital Nomad visa, D2 Entrepreneur visa, D3 route or family reunification, the latest figures offer several practical lessons.

Should you rent first or buy immediately?

Renting first can provide time to understand the local property market, explore different areas and establish whether a particular location suits your lifestyle.

For example, the experience of living in a busy part of Lisbon may be quite different from living in coastal Algarve, central Portugal or Madeira. Schools, public transport, healthcare, summer tourism, winter conditions and access to an airport can all influence the suitability of a location.

However, renting first also involves costs, and rising rents mean that delaying a purchase is not necessarily financially advantageous.

The right choice depends on personal circumstances, intended length of stay, funding, available accommodation and the implications for the immigration process.

Compare completed prices, not just property listings

Advertised asking prices show what sellers hope to receive, not necessarily what buyers actually pay.

INE's published median transaction figures can offer a useful starting point for regional comparisons. Within a neighbourhood, however, a meaningful comparison should consider property condition, energy performance, floor area, building age, legal status and recent comparable sales.

A national decline in transaction numbers does not automatically give buyers the ability to negotiate a substantial discount. Some properties may attract little interest, while well-located homes may still sell quickly.

Plan your full property budget

In addition to the purchase price, allow for legal due diligence, transfer taxes, stamp duty, registration, mortgage costs where applicable, maintenance and any renovation work.

Buyers requiring financing should establish their likely borrowing capacity early, particularly following the August 2026 credit rule changes.

For visa applicants, property ownership is not necessarily required. Depending on the residence route and consular requirements, suitable rental accommodation may also be acceptable.

Consider tax residence before signing the deed

The timing of a property purchase relative to Portuguese tax residence can have significant consequences under the 2026 IMT rules.

For someone intending to relocate on a D7, D8, D2 or another residence route, it is worth discussing the timing of the purchase deed, tax registration and any potential refund before committing to a transaction.

Our separate IMT guide explains the relevant rules and deadlines, while our guide to timing a Portugal visa application explains why coordinating the different steps matters.

Is 2026 a good time to buy property in Portugal?

The latest statistics do not provide a simple yes or no answer.

Prices are still rising rapidly by historical standards, affordability remains challenging and borrowing costs have increased. At the same time, fewer completed sales may mean some sellers are more willing to negotiate, depending on their circumstances and the specific property.

It is equally possible for a particular property to be overpriced even in an area experiencing strong annual growth.

For people planning to live in Portugal rather than purchase purely for investment, the practical questions are whether the property meets their long-term needs, whether the full cost is affordable and whether buying fits their relocation timetable.

There is no reliable basis in the current data for assuming that waiting a few months will produce lower prices. Nor can the recent rate of price growth be assumed to continue.

What happens next in Portugal's housing market?

The next important publication will be INE's House Price Index for the third quarter of 2026, scheduled for 23 December 2026.

That release should help establish whether the slowdown in annual price growth is continuing and whether the decline in transactions is becoming more pronounced.

Several developments are worth monitoring:

• Whether national house price growth slows for a third consecutive quarter.
• Whether transaction volumes recover or continue falling year on year.
• Whether purchases by non-residents remain below earlier levels.
• Whether new housing supply begins to ease shortages.
• How European Central Bank decisions influence Euribor and mortgage affordability.
• Whether the gap between property prices and household purchasing power narrows.

The ECB's next monetary policy meeting is scheduled for 28 and 29 October 2026. Its outcome had not been announced at the time of this article.

For now, the evidence points to a market experiencing slower growth and fewer transactions, not a nationwide fall in property prices.