Portugal Property Market Update: House Prices Rise as Sales Fall

On 22 September 2026, Statistics Portugal (INE) published its House Price Index for the second quarter of 2026, offering fresh insight into the Portuguese housing market.

The figures show that house prices increased by 16.5% compared with the same quarter of 2025.

This represents a significant annual rise, though it is slightly below the 17.8% recorded in the previous quarter.

At the same time, the number of homes sold fell by 6.4% year-on-year. The data provided by INE shows that between April and June 2026, 40,142 dwellings were sold across the country.

However, compared with the first quarter of 2026, this represents an increase of 6.4%.

The Q2 report builds on the insights offered by the first quarter’s data, which suggests that while prices are still rising, buyers are taking longer, looking harder, and becoming more careful about what they buy.

Even with fewer sales, the total value of homes sold reached €10.7 billion in the second quarter, up 4.2% from the same period in 2025.

In plain terms, this second quarter represents an improvement over the more mixed signals of Q1, though still showing a distinct picture from the recent years of unfettered growth. While annual house-price growth slowed for a second consecutive quarter, it remained very strong at 16.5%. Sales were still lower than a year earlier, although activity recovered from Q1.

For anyone buying property in Portugal, the message is not simply that the market is rising. It is that Portugal remains competitive, but the search process now requires more care.

Existing homes were the strongest part of the market, with prices for existing dwellings rising by 18% year-on-year, compared with 12.3% for new dwellings.

On a quarterly basis, existing homes rose by 3.6%, while new homes increased by 3.5%.

This difference reinforces the issue of low supply in the Portuguese market and pushes buyers towards existing properties, especially when they are located in major urban centres such as Lisbon and Porto.

However, quarterly figures show near-identical growth between new and existing homes, suggesting that increasing supply may be beginning to reach the levels necessary to ease the pressure in the wider market.

The four-quarter moving rate of change reached 17.7% in the second quarter of 2026, the highest level in the available series. Existing dwellings rose by 19.4% on this measure, while new dwellings increased by 13.1%.

The data on who is buying also deserves attention, as the INE report shows a slight shift from previous years.

Households bought 34,935 homes in the second quarter, equal to 87.0% of all transactions. In value terms, household purchases reached €9.3 billion, or 86.6% of the total market.

Most buyers were resident in Portugal. Purchasers with tax residence in Portugal bought 38,252 homes, representing 95.3% of all transactions. These purchases were worth €9.9 billion, up 4.8% from the same period in 2025.

The number of foreign-resident buyers moved in the opposite direction. They bought 1,890 homes in the second quarter, down 10.3% year-on-year. The number of buyers residing in the European Union fell by 14.9%, while the number of buyers from other countries fell by 5.1%.

This is an important point for anyone looking at Portugal from abroad. International buyers remain part of the market, particularly in lifestyle, relocation, second-home and prime property segments. However, the second-quarter figures show that domestic demand is doing most of the work at the national level.

For overseas buyers, this is important because it shows that Portugal’s housing market is not being supported by international demand alone. Strong local demand can help support confidence in established residential markets.

Every region recorded a fall in the number of transactions compared with the second quarter of 2025. Madeira had the sharpest decline, with transactions down 15.2%, followed by the Algarve, which fell by 12.4%. The smallest decline was seen in the Alentejo, where transactions fell by just 0.8%.

However, lower sales volumes did not translate into lower market values everywhere. Transaction values rose in every region except Madeira and the Algarve.

The strongest increases were recorded in Oeste e Vale do Tejo, Centro, Azores, Península de Setúbal, and Alentejo, with annual growth ranging from 5.5% to 20.2%.

That split is worth watching, as it suggests that regional markets outside of the most popular and expensive are still attracting higher-value activity, even when fewer homes are being sold.

For buyers, this shows why regional comparison matters. Some areas may have fewer transactions but still show strong value growth, especially where infrastructure, lifestyle appeal or access to major cities supports demand.

For Portugal Homes, this supports a more detailed reading of Portugal’s property market. Buyers do not need to look only at the most obvious areas, such as Lisbon, Porto and the Algarve.

Established secondary markets and well-connected regions are also becoming increasingly relevant, especially where lifestyle appeal, infrastructure and access to major cities all support continued demand.

Oeste e Vale do Tejo and Península de Setúbal are good examples of that wider trend. Both benefit from their connection to Lisbon while offering different price points from the capital’s most expensive neighbourhoods. In a market where affordability is under pressure, that matters.

The figures on new homes also show why supply remains a central issue. In the second quarter, 7,835 new dwellings were sold, down 5.7% from the same period in 2025. The value of new dwelling transactions fell by 1.6% to €2.6 billion.

For buyers looking for new-build property, this reinforces the importance of acting carefully but decisively when suitable options become available.

Existing homes made up most of the market. There were 32,307 existing homes sold, equal to 80.5% of all transactions. Their transaction value rose by 6.1% to €8.1 billion. This also means buyers may need to compare resale properties carefully, especially in established areas where demand remains strong.

This leaves Portugal with a familiar challenge: demand remains, but the market continues to lean heavily on existing housing stock.

After analysing the House Price Index for the second quarter of 2026, one of the most closely watched reports released by INE this year, Portugal Homes sees the second quarter of 2026 as a sign of a market that is changing but not necessarily weakening.

Prices are still rising and transaction values are higher than a year ago. Buyers who are resident in Portugal continue to account for most activity, but the drop in sales volumes shows that the market is no longer moving with the same ease.

That is not necessarily a bad thing. A more selective market can be healthier for serious buyers. It rewards better locations, realistic pricing, and properties that match a clear lifestyle, rental or relocation need.

For Portugal, the data points to a housing market that remains under pressure from demand and limited supply. For buyers, it highlights the importance of comparing locations, property types and long-term plans carefully.

The broad story is still positive, but it is no longer enough to say that Portugal’s property market is growing. The better question now is where growth is strongest, where demand is most durable, and where buyers can still find the right property at a sensible price point.

Portugal Homes will continue to follow the latest housing market data and support buyers looking to make informed property decisions in Portugal.

Anyone seeking properties for sale in Portugal can speak with our team of expert advisors for guidance on locations, available homes and current market conditions.