Foreigners Pay 62% More for Homes in Portugal Than Locals, Driving Price Surge

According to data from the National Statistics Institute (INE), foreigners are paying significantly more for homes in Portugal's major urban centers. In Greater Lisbon, the median price paid by foreigners is 62% higher than that paid by Portuguese residents, while in the Metropolitan Area of Porto, the difference is 29%. These figures are based on the second quarter of 2025 and contribute to the accelerating housing prices nationwide, which saw a 19% jump compared to the same period last year.

This 19% increase marks a slight acceleration from the 18.7% rise in the first quarter and is the highest value since at least 2019, when the current statistical series began using median transaction data from fiscal and other sources.

Price Differences by Buyer Type

• In Greater Lisbon, Portuguese residents paid a median of 3,358 euros per square meter, while foreigners paid 5,438 euros per square meter.
• In the Metropolitan Area of Porto, residents paid 2,268 euros per square meter, and foreigners paid 2,925 euros per square meter.
• Nationally, the overall price difference averages around 35%.

What is the Median Price?

The median is the middle value in a sorted list of prices, unlike the average, which sums all prices and divides by the number of transactions. This makes the median less sensitive to extreme values.

Limitations of the Data

The comparative analysis has limitations: buyers classified as having a "fiscal domicile abroad" might include Portuguese citizens living overseas, while those with Portuguese fiscal addresses could be foreigners who recently moved. Additionally, the data does not distinguish between house sizes or specific locations, which could provide deeper insights.

Portuguese Buyers Remain Active

Despite the price disparities, Portuguese buyers are very active in the housing market, including in higher-end segments. João Cília, executive president of Porta da Frente Christie's, notes that wealthy immigrants, such as North Americans and Brazilians, tend to buy more expensive properties in premium areas, but they represent a small portion of transactions. He emphasizes that foreigners and locals operate in different market segments, and the high prices paid by foreigners do not necessarily drive up overall prices.

Greater Lisbon shows the most significant price gap between foreigners and Portuguese. Source: INE

Cília adds that lower interest rates have boosted Portuguese participation, with many upgrading to newer or larger homes, even if farther from urban centers. Meanwhile, foreign buyers, affected by changes in the Non-Habitual Resident (NHR) regime, are experiencing slower price growth compared to the overall market.

Transaction Volume and Market Dynamics

In the second quarter of 2025, 41,608 family dwellings were transacted in Portugal, with a median price of 2,065 euros per square meter. The number of transactions increased by 15.6%, indicating robust demand despite rising prices. Patrícia Barão, partner and head of residential real estate at Dils Portugal, points out that foreign buyers account for only about 6% of total transactions, and 88% of purchases are for own housing, debunking the idea that investors dominate the market.

Government Measures and Bureaucratic Challenges

Barão acknowledges that government initiatives, such as reduced VAT, tax deductions for rents, and public-private partnerships, are positive steps to address the housing deficit. However, she warns that bureaucracy could hinder these efforts, stressing the need for swift execution and simplified processes to translate intentions into concrete results.

Regional Price Accelerations

Housing prices accelerated in 19 of the 24 municipalities with over 100,000 inhabitants. Notable accelerations occurred in Vila Nova de Gaia (13.4 percentage points above the national growth), Coimbra (12.7 points), and Amadora (10.9 points). In contrast, Cascais saw the largest slowdown, with prices rising more slowly than the national average.

Municipalities with the highest housing prices include Lisboa (4,865 euros/m²), Cascais (4,346 euros/m²), Oeiras (4,161 euros/m²), Porto (3,309 euros/m²), Odivelas (3,219 euros/m²), and Almada (3,101 euros/m²).

Lisbon Parishes: Marvila Corrects, Beato Accelerates

In a finer analysis of Lisbon's parishes, the highest median prices (over 5,300 euros/m²) were in Santo António, Parque das Nações, Campo de Ourique, Estrela, and Misericórdia. The parish of Beato had the highest growth rate at 32.3%, while Marvila experienced a significant correction with a 16.9% decrease in median prices.