Funchal, the 5th Best City to Property Invest

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Funchal, the 5th Best City to Property Invest
Reading time: 6 minutes
Published: 15th November 2021, 11:01am
Updated: 28th January 2022, 4:06pm

When you are planning to purchase a second home for the holidays, you may wonder where would be best? Also, most importantly, will it be a good investment for the future?

At Portugal Homes, we believed purchasing a second property is a a very important decision, and we strive ourselves on helping investors find the perfect second home that is fit for their specific needs, whether it be a holiday home for the family to escape to in summer months, or a future residential investment for subletting abroad as a source of additional income. In a recent study, conducted by Compare the Market, it was found that the city of Funchal in the archipelago of Madeira, was ranked 5th place as “the best city in the world to invest in’. 

Funchal Madeira | Lookout view of the city considered the 5th best city to property invest.
Funchal, Madeira


The holiday home hotspot of Funchal was based upon the following 7 key factors: Activities to occupy, restaurant availability, average monthly cost for a family of four, average property price per sq. m, crime index score, average temperature, and rainfall of the location.

Funchal earned a total of 6.41 points out of 10, overall the island earned high on climate, and security having a lower crime rate; secondly based on the average cost of living, which is about €1.966 per month. Lastly, for property price per sq. m, the average value stands at €1,729. Making the city of Funchal, your future prospective home away from home for the holidays! 

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Now let us tell you why Funchal can be the right place for your holiday home - the city of Funchal, Madeira is considered the 6th largest city in Portugal, historical capital of Madeira for more than five centuries. Situated in the southernmost coast of Madeira Island, founded in 1421 by Portuguese navigator Joao Gonçalves Zarco, who was originally under Spanish and British control. The name Funchal, originally derived from an abundant local wild herb, “foeniculum vulgare”, a fennel known in Portuguese as funcho, and was historically addressed as the city of “white gold” for its Madeiran sugar. 

Funchal Madeira | Lookout view of the city considered the 5th best place to property invest.
Lookout view of Funchal, Madeira | Portugal


Funchal has breathtaking views, surrounded by green mountains, the island offers a beautiful opportunity to witness, seaside views, mountainous hiking and trekking adventures, combined with city life in Funchal´s city center. You can experience the best shopping, interesting museums, amazing restaurants, pubs at the Zona Velha, literal translation of the Old Zone, where the majority of the city’s attractions are located. 
For an outdoor enthusiast, visit Pico do Areeiro - one of the highest peaks of Madeira, where you can soak up a panoramic view of the island, a definite must-see and do! Santa Catarina Park is another lovely destination, a 36, 000 m2 green space, where you can see a variety of flora & fauna species from all over the world; an excellent place to relax and enjoy the lookout points.

For more abundant nature escapes in Funchal, you have the Ecological Park of Funchal featuring 10 km2 of mountainous terrain, and walking trails for a hiker’s glee!

It’s not a surprise to see how Funchal made the charts with Compare the Market for a holiday property investment. Homes in Funchal vary from farmhouse estates, villas, apartments, and land plots, Portugal Homes can help you find the perfect investment property!

Explore more on Madeira Island, see our guide here.

Pico do Arieiro in Funchal Madeira, a great place for a holiday home near nature.
Pico do Areeiro in Funchal, Madeira
Ecological Park of Funchal in Madeira, a beautiful spot for a holiday home near nature
Ecological Park of Funchal, Madeira

Source: Idealista

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Buying Property in Portugal

Portugal Homes has very experienced and knowledgeable professionals working with some of the most established and reputable developers Portugal has to offer. Our vast experience allows us to guide you through the best investment choices.

Whether you want a holiday home or an investment property, we select the best units for your profile and take care of all the process from start to finish. Even after the sale! Our After Sales services assume the responsibility of furnishing your property at your taste, taking care of the property in your absence, managing the rentals if you wish to rent your property when you’re not in Portugal and so much more!

To learn more about the Portuguese Non-Habitual Resident Program and our After Sales services, please fill the form below.

Thanks to Andreia Leite for the comprehensive and timely updates on the construction progress of the new development we purchased!

Investor from the USA

Very helpful. Work with his heart. Mark is a very nice advisor. 

Investor from Morocco

Everything was perfect. I got all answers about my questions. 

Investor from Turkey

Ryan was an excellent real estate agent, he really steered me in the right direction based on what I said was important to me. Living in another country, I wasn't as familiar with the city as he is. Where I thought I wanted to live and what I truly wanted were not the same. He took the time to listen and figure out the best spot for me, and we are very happy with it - far more than we would have been elsewhere.

Investor from the USA

The overall experience was great from follow up to After Sales. I would like to give special thanks to Mr. Simon, Ms. Francisca and Ms. Mariana.

Investor from UAE

George Hobson is a pleasant young man, came across as knowledgeable, experienced, hardworking, honest & disciplined; I felt very comfortable in easily making my investment.

Investor from UAE