What are the forecasts for house price rises in 2025?

If you're thinking of buying a house in Portugal, 2025 promises to continue to be a challenging year for the property market.
Trends point to a continued rise in house prices, especially in the most sought-after regions with limited supply.

But what factors are putting pressure on prices and which areas will be most affected? Let's explore the main highlights and forecasts.

 

Why are Prices Continuing to Rise?

House prices should continue to rise in 2025 due to demand consistently outstripping supply. Here are the main factors that underpin this forecast:

• High demand and limited supply: The discrepancy between the amount of people looking for housing and the availability on the market continues to be one of the main drivers.
• Favourable economic factors: Rising household disposable incomes and a potential drop in interest rates in 2025 could help keep demand high.
• Production of new homes: Despite the expected increase in construction of around 50,000 new homes, these are not expected to be significantly more affordable, perpetuating high values.
• Focus on urban and tourist areas: The most sought-after areas, such as Lisbon, Porto and the Algarve, will remain under pressure due to their attractiveness to both residents and investors.

 

Regions Most Affected by Rising Prices

Although the increase is generalised, some regions will be more vulnerable due to strong demand and limited supply:

1.  Major Urban Centres
   Lisbon: It remains the most expensive region in the country, with average prices of €2,795/m², and is highly sought after by both nationals and foreigners.
   Oporto: With average prices of 1,902€/m², the Oporto metropolitan area is on a path of accelerated growth.
2.  Tourist Regions
   Algarve: It remains one of the most exclusive areas, with average prices of 2,654€/m². The demand for second homes and tourism properties sustains the increase.
   Autonomous Region of Madeira: Has seen significant growth of 43% in recent years, with average prices of 2,107€/m², and should continue this trend.
3. Metropolitan and coastal areas
   Setúbal Peninsula: With average prices of €1,950/m², it stands out for its proximity to Lisbon and its attractiveness to investors.
   Alentejo Litoral and Oeste: Both regions continue to attract attention, with average prices of 1,718€/m² and 1,478€/m², respectively.
4. Growing regions
   Cávado and  Aveiro: With prices of 1,402€/m² and 1,301€/m² respectively, these areas are on the rise due to their proximity to urban centres and growing demand.
   Ave: Although it has lower prices (1,190€/m²), it is seeing a steady increase due to growing demand.

 

Impacts of rising prices

Despite the forecast of some stabilisation in high values, the increase will continue to exacerbate the inequality between luxury and affordable housing. In urban and tourist areas, prices are likely to remain out of reach for many families, making access to housing difficult.
The new housing projects, although positive for increasing supply, are unlikely to offer a solution for affordable housing, since most remain focused on the luxury segment.

Final considerations

If you're planning to buy a house in 2025, it's essential to prepare for a competitive market with high prices, especially in urban and tourist areas.
Considering options in growing regions, such as Aveiro or Cávado, can be an interesting alternative for those looking for better pricing conditions.

The property market in Portugal will continue to challenge those who want to invest or find their home, but being informed about trends and forecasts can help you make safer and more strategic decisions.

Count on us to find your new home!