After two years of double-digit increases, Portugal led the residential appreciation in Europe. In 2024, prices rose 11.5%. By 2025, they will have increased by more than 15%, more than double the European average. Now, according to projections, growth is expected to slow to around 7% this year and to between 5% and 5.5% in the following two years. Even so, Portugal will continue to be in the European top 3 in terms of valuation.

In my view, this is not a sign of weakness. It is a sign of maturity.

What sustains this market is not just enthusiasm. It is structural. Demand remains solid, driven by demographic shifts, rising households and a persistent supply gap. Europe may be ageing, but the number of houses needed is growing faster than the population. In Portugal, the scarcity is evident. Approximately one house is completed for every six sold. This reality alone explains much of the pressure on prices.

But there is another relevant fact. The Portuguese market is now considered one of the most overvalued in Europe. This does not mean an imminent bubble. It means that accessibility is under pressure and that the future balance will depend on the ability to increase supply, speed up licensing and strengthen construction.

At the same time, real estate investment shows confidence. In 2025, it reached 2.8 billion euros, growing 22% compared to the previous year and exceeding the average of the last decade. Offices, retail, and hospitality concentrated most of the capital. Yields remained stable and even with potential for compression in segments such as logistics.

Lisbon continues to lead as the most expensive city, above 6,000 euros per square meter, but the phenomenon is no longer exclusively metropolitan. District capitals such as Guarda, Beja and Santarém register growth of more than 20%. In the Azores and Madeira, some islands show impressive valuations. The market is no longer centralised. It became national.

In the residential segment, the median price already exceeds 3,000 euros per square meter. And even with stabilised interest rates and less room for additional cuts, the economy continues to favour the sector, with controlled unemployment and relatively resilient incomes.

It remains to be seen to what extent external factors, such as global economic instability or recent extreme weather events, could introduce greater caution.

As an observer of the national and international market, I see a country that is no longer just an emerging destination. It is a consolidated market. And this brings advantages, but also responsibility. The challenge now is not to grow quickly. It is to grow with balance.