During recent years, the Portugal real estate market has seen exceptional growth, becoming the most attractive destination for investors and families relocating to Europe. According to a report by Eurostat, the prices of houses in Portugal have increased by 16.3% in the first quarter of 2025. Properties in the major business-centric hubs of Portugal, such as Lisbon and Porto, are getting the attention of a large number of global investors due to the luxury lifestyle they offer. Similarly, places such as Braganca, Guarda, and Castelo Branco are also catching the eye of foreign buyers for budget-friendly opportunities and low-cost living.
House Price Growth Portugal
According to the Idealista price index, the housing prices in Portugal surged by 7.6% in September 2025, compared to the same month in 2024, reaching the median cost of €2,934 per square metre. While prices in cities like Beja (33.9%), Guarda (20.5%), and Santarém (26.7%) surged, buyers who seek affordability can still find cheap real estate Portugal options in smaller and mid-scale areas.
Most Expensive Cities vs Affordable Cities
Expensive Cities and Why They Attract Foreign Buyers
The prices of properties vary in Portugal depending on the city you are buying the property in.
High-net-worth individuals (HNWIs) who prefer luxury are drawn to high-demand areas of Portugal due to the lifestyle, infrastructure, and investment potential. The most expensive places to buy property in Portugal are:
Lisbon Portugal Real Estate
According to Idealista, a website for Portugal real estate, the Lisbon metropolitan area is one of the key attractions for global investors. The city offers world-class infrastructure, a booming tech hub, luxury living, and excellent rental demand. In 2025, the median price per square metre in Lisbon is €5,824. Lisbon Portugal real estate continues to surge as one of Europe's most dynamic property markets. As per the 2025 European Prime Price Forecast by Knight Frank, Lisbon is ranked among the top 10 EU cities for luxurious properties in Europe, and it is claimed that the prices will appreciate by 4.5% this year. This demonstrates the strong interest of both locals and international buyers in Lisbon Portugal real estate.
Porto Portugal Real Estate
Porto, Portugal’s second-largest city, appeals to investors due to its vibrant culture, excellent infrastructure, strong business opportunities, and peaceful coastal environment. The cost to buy a home in Porto is €3,826 per square metre, which is more affordable than Lisbon. The Porto real estate market is expected to grow more, a recent forecast claims a 5.8% increase in Portugal’s property market by 2025.
Faro Portugal Real Estate
Faro is a good place to invest in property in Portugal due to its growing tourism sector, growing rental demand, and lower costs than Lisbon. Buying a home in Faro costs €3,374 per square metre. Investors such as retirees are majorly drawn to Faro Portugal real estate and expats looking for sun and peaceful seaside living.
Setubal Portugal Real Estate
The rising demand for Setubal Portugal real estate is due to its coastal lifestyle and proximity to Lisbon. The city offers different types of properties that suit global investors' lifestyles, including villas, luxury apartments, and beach houses. If you consider buying a home in Setubal, the median price per square metre is €2,961.
Why are Affordable Places Attractive Among Property Buyers?
Buyers with smaller budgets can turn to Portugal’s smaller cities, where cheap real estate Portugal remains available to them. These cities attract foreign buyers as they can benefit from their tranquil lifestyle and community-based living with lower entry costs than Lisbon and Porto. Moreover, these cities have growing potential for rural tourism and short-term rentals. The affordable cities with median price per square metre include:
Viseu (€1,616/m² )
Santarém (€1,597/m² )
Beja (€1,338/m² )
Braganca (€1,063/m² )
Guarda (€983/m² )
Castelo Branco (€965/m² )
Cheap Mortgage Loans Until 2028 - A Boost For Foreign Buyers
The financing landscape in Portugal is becoming even more attractive. The Public Finance Council, an independent fiscal institution that monitors Portugal’s fiscal rules and public finances, projects that the 3-month Euribor rate will fall from 2.2% at the end of 2025 to 1.9% in 2026-27, before slightly increasing in 2028. This means that in the next two years, the families and foreign investors taking out mortgage loans in Portugal will benefit from lower repayments. Thus, the reduced borrowing costs encourage more investments in both high-demand areas, such as Lisbon, Faro, and Setubal, and affordable areas, such as Viseu and Castelo Branco. This is beneficial for foreigners as they can finance property at historically low rates, ensuring greater affordability and higher long-term returns.
Conclusion
Whether people seek luxury in Lisbon or affordability in Castelo Branco, Portugal real estate market 2025 offers something for everyone. Portugal remains one of the most in-demand destinations for real estate investment in Europe due to lower mortgage rates in Portugal, affordable property Portugal, and strong Portugal lifestyle and business opportunities.