Why Portugal Still Tops the List for Property Investors in 2025

A balanced market of growth and lifestyle

Portugal’s strength lies in balance. While prices have risen, they remain lower than in other Western European nations, with average costs around €3,400 per m² in Lisbon and closer to €2,500 per m² in Porto — far below comparable neighbourhoods in Paris, London, or Madrid. Inland and coastal alternatives like the Silver Coast, Braga, and Alentejo still offer opportunities below €2,000 per m², creating room for appreciation.

Lisbon and Porto attract investors looking for urban sophistication and year-round demand, while the Algarve and Silver Coast remain magnets for lifestyle buyers seeking sea views, golf courses, and warm weather. Each region has evolved its own identity: Lisbon is Europe’s tech-hub capital; Porto is an emerging cultural and logistics centre; and the Algarve continues to dominate the luxury second-home market.

Herriman explains:

> “Portugal is one of the few European countries where lifestyle buyers and serious investors genuinely overlap. A two-bed apartment in Lisbon’s central districts might generate a 4% gross yield and appreciate 6–8% annually — and you still get world-class beaches, cuisine, and culture within an hour.”

Foreign demand remains high — even post-Golden Visa

Although the real-estate route of the Golden Visa program ended in October 2023, international demand has not vanished. Data from Idealista (September 2025) shows that foreign buyers still account for over 5% of total transactions, with the UK, France, the United States, and Germany remaining top sources.

Portugal’s non-habitual resident (NHR) tax regime, though revised, still offers incentives for retirees and remote professionals relocating long-term. The new Mais Habitação framework has cooled speculative buying but kept legitimate end-users active, shifting focus from citizenship seekers to lifestyle and income investors.

> “The investor profile has changed — not disappeared,” Herriman notes. “We’re seeing fewer quick-flip buyers and more clients investing for yield, relocation, or lifestyle value. That creates a healthier, more sustainable market.”

Economic fundamentals driving resilience

Portugal’s economy continues to outperform much of the Eurozone. The European Commission forecasts GDP growth of 2.4% in 2025, nearly triple the regional average. Tourism, technology, and renewable energy sectors have been major growth drivers, feeding into rental demand and local spending.

Foreign direct investment in Portuguese real estate reached €1.7 billion in 2024, with international funds and private investors targeting logistics, hospitality, and residential assets. Mortgage lending has tightened slightly amid higher ECB rates, but domestic affordability remains manageable compared with other Western European nations.

“Strong tourism and a recovering domestic economy underpin this market,” says Herriman. “Even when other European countries slow down, Portugal benefits from international demand, digital-nomad visas, and infrastructure investment — all of which sustain its housing sector.”