Up More Than 140%! Portugal’s Property Market Continues to Heat Up: Long-Term Recovery or the Early Signs of a Bubble?

Ten years ago, the average price of a second-hand home in Greater Lisbon was just €158,300.

Today, that figure has reached €392,800.

According to data published by Statistics Portugal (INE) and compiled by Portuguese business newspaper Jornal de Negócios, residential property prices in Portugal have risen significantly over the past decade. Greater Lisbon, Porto and the Setúbal Peninsula have recorded particularly strong increases, with second-hand home prices in some areas now two to three times higher than in 2016.

With house prices rising by more than 100% over the past decade, one question is becoming increasingly difficult to ignore: is Portugal’s property market still undergoing a long-term revaluation, or are signs of overheating beginning to emerge?

Second-Hand Home Prices in Greater Lisbon Rise 148% in Ten Years

In the second quarter of 2026, the average transaction price of a second-hand home in Greater Lisbon reached €392,800, around €6,000 higher than in the first quarter and approximately €30,000 above the level recorded a year earlier.

Over the past 12 months, the average price of second-hand homes in Greater Lisbon increased by 11.1%, outpacing the 6.2% rise recorded for new homes.

Second-hand properties also continue to dominate the local residential market. Between April and June, they accounted for around 84% of housing transactions in Greater Lisbon.

New homes remain considerably more expensive, with the average transaction price in Greater Lisbon now standing at approximately €583,800. Although this was €32,500 lower than in the first quarter, it was still around €24,000 higher than in the second quarter of 2025.

The scale of the increase becomes even clearer when viewed over a longer period.

In the second quarter of 2016, the average price of a second-hand home in Greater Lisbon was just €158,300. By the same period in 2026, it had climbed to €392,800, representing a cumulative increase of approximately 148% over ten years.

In other words, a typical second-hand home worth around €160,000 a decade ago now costs close to €400,000 on average.

Even Stronger Growth on the Setúbal Peninsula

Rising house prices are not limited to Lisbon’s core areas.

As housing supply remains tight across Greater Lisbon, residential demand has gradually spread to surrounding areas, with the Setúbal Peninsula experiencing particularly significant price growth.

Across municipalities including Alcochete, Almada, Barreiro, Montijo, Palmela, Seixal, Sesimbra and Setúbal, the average price of a second-hand home has now reached €273,500, while the average price of a new home stands at €389,400.

In the second quarter of 2016, the average price of a second-hand home on the Setúbal Peninsula was just €83,300.

Over the past decade, the figure has risen from just over €80,000 to more than €270,000, meaning average prices are now more than three times their 2016 level.

This also shows that housing demand and price pressures in the Lisbon property market are no longer confined to the city centre, but are increasingly spreading across the wider metropolitan area and surrounding municipalities.

Porto Records a 165.6% Increase Over Ten Years

A similar trend can be seen in northern Portugal.

In the second quarter of 2026, the average price of a second-hand home in the Porto Metropolitan Area reached €259,200, while the average price of a new home stood at approximately €305,300.

In the same period in 2016, the average second-hand home price in the Porto Metropolitan Area was just €97,600.

Over ten years, prices have therefore risen by 165.6%, an even greater increase than in Greater Lisbon.

At the national level, the average transaction price of a second-hand home in Portugal has now reached €251,000, up €4,700 from the previous quarter and approximately €30,000 from the same period in 2025.

Compared with an average of €108,400 in 2016, second-hand home prices nationwide have increased by approximately 131.5% over the past decade.

New-build prices have also risen substantially, increasing from €177,800 in 2016 to around €330,300 today, representing cumulative growth of approximately 85.8%.

Why Have House Prices Continued to Rise for a Decade?

Looking at the figures alone, Portugal’s property market has clearly undergone a significant revaluation over the past decade.

However, there is no single explanation for the rise in house prices.

Over the past ten years, Portugal has experienced growth in tourism, international population inflows, increased foreign investment, and stronger international appeal in cities such as Lisbon and Porto. At the same time, housing construction and new supply have not expanded at the same pace, contributing to a persistent imbalance between supply and demand in major urban areas.

In recent years, this demand has increasingly spread beyond central locations.

As prices in central Lisbon have risen, some households have turned towards areas such as Sintra, Mafra, Vila Franca de Xira and the Setúbal Peninsula. A similar expansion of housing demand is also taking place across the Porto metropolitan area.

The price increases of the past decade therefore reflect not only changes in the value of property in Portugal’s major cities, but also the gradual expansion of residential demand across a wider geographical area.

Revaluation or a Property Bubble?

A rise of more than 100% over ten years naturally raises questions about whether the property market may be overheating.

However, house price growth alone is not enough to determine whether a property bubble has formed.

Other factors also need to be considered: whether property prices have become significantly disconnected from household incomes and rental levels, whether housing supply can keep pace with demand, whether purchases are heavily dependent on credit expansion, and whether current price levels can remain sustainable if interest rates, demographics or broader economic conditions change.

One of the clearest challenges facing Portugal’s property market remains the imbalance between housing demand and new supply.

This also helps explain why price pressures are gradually spreading from the core areas of Lisbon and Porto to surrounding cities and municipalities. When supply in central markets remains limited and prices continue to rise, demand naturally begins to look elsewhere.

Rather than simply defining the past decade’s growth as either a “boom” or a “bubble”, the more important question is whether Portugal can increase housing construction, improve the efficiency of planning and approval processes, strengthen transport networks and support the development of more regional centres, allowing housing supply to gradually keep pace with changes in population and demand.

Reference link:

https://executivedigest.sapo.pt/816594-2/

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