6th July 2022
Portugal’s Residential Market: Savills say there is “unbreakable demand”

In the last 2 years, the pandemic in Portugal has impacted the financial situation of many families. Two lockdowns and uncertainty regarding employment created a “need to save” conscience. As a result, the families savings rate increased 13.1% yoy in 2020 and 11.3% yoy in Q3 2021.


Contrary to the initial belief, unemployment remained low, supported by government measures, settling between 7% in 2020 and 6.6% in 2021. Interest rates for mortgage loans continued decreasing, a trajectory which started in 2013, reaching 1.22% in 2019 and 0.81% in 2021. These factors have created a favourable climate for mortgage loans. In 2021, banks granted up to €15.3M, 34% more than in 2020 and 43% above 2019.

In 2021 in Portugal, around 205.000 dwellings were sold, 26% more compared to 2020 and 20% higher than 2019. The Lisbon metropolitan area accounted for 71.000 sales of dwellings, followed by the Centre region  (43.000) and the Porto metropolitan area (34.000). The average sale price of homes in the Lisbon metropolitan area, reached €4.245€ per sq. m for new homes and €2.279 per sq. m for re-sale homes,  increasing 23% since 2019. The national average stands at €1.880 € per sq. m.

For the high-end market in the Lisbon municipality, 4.071 dwellings were sold in 2021, a 59% growth in sales when compared to 2019. The average transaction price for new houses was 6.793 € per sq. m and 5.829 € per sq.m for re-sales.


According to the World Cities Prime Residential Index study, prepared by Savills, the world prime residential market is well positioned to achieve an average growth of 4.3% in 2022, the second highest value of the last five years. In the specific case of Lisbon, the study predicts that the capital’s prime residential market will grow by 1.9% this year.

The prime market should continue to register a progressive demand, maintaining the investment trend in the luxury market. Price increases are expected to continue, but at a slower pace and towards a stabilisation trajectory.


For foreign investors, also affected by the pandemic and driven by the possibility of remote work, Portugal continues to be an appealing market. Urban centres retain their attractiveness, but neighbouring areas are now of primary interest. Smaller cities with lower construction density, a less expensive cost of living and good infrastructure in terms of mobility, transport and technology are the new drivers for these investors.


Golden visas are still a useful investment tool, but for 2022 there are new rules: a minimum amount of €500.000 to subscribe to investment funds (eligible for Lisbon and Porto) and real estate investment for residential purposes will be limited to interior areas of the country, as well as Madeira and Azores islands. These new rules may benefit the interior areas and reduce the pricing surge in the urban areas of Lisbon and Porto. The main beneficiaries should be the coastal areas of Alcacer do Sal, Grandola, Odemira and Santiago do Cacem, apart from Madeira and Azores, the latter already a target for foreign investment.

In 2021, investment through this Golden Visa regime decreased 28.7%, compared to 2020, to €460.8M, equivalent to 865 visas. However, in December 2021 there was an increase of 52% compared to December 2020, a trend that continued in January 2022, which was 48% above January 2020.


Since 2021, the Programme has raised around €6 bn, the majority, €5.5 bn, related to real estate, and €362M for urban rehabilitation, equating to 9585 visas via the purchase of real estate and 1009 with a view to urban rehabilitation. Citizens from China, Brazil, Turkey, South Africa and Russia are the top recipients of the permits.


The housing market will continue its growth, based upon an expanding economy (4.5% in 2021), low employment rates and low interest rates that make mortgage loans more attractive.

As demand keeps outstripping supply, prices may continue to rise for both sales and rentals.

With new rules entering into force in 2022, some families will have less access to mortgage loans and others will simply not be able to afford ownership – for these the rental market will be the only viable housing solution.

For investors, long-term rentals will provide an effective and profitable option, less exposed to economic cycles and unforeseen events (like a pandemic). Options such as build-to-rent or senior living offer a product that is more resistant to fluctuations, innovative and adaptable to various markets.

The Portuguese Recovery and Resilience Plan includes two programmes on affordable housing. One of €775 million covers the construction and rehabilitation of vacant State-owned spaces for rent at affordable prices. The other, of €375 million, is for the construction, adaptation and renovation of student residences. The creation of these programmes may boost public-private investment partnerships in order to develop the housing stock.


To read the report in full, see  portugal-real-estate-market-anual-report.pdf (savills.co.uk)


To keep updated on how you can invest in Portugal, or if you want to move there for business or lifestyle reasons, make sure you get advance notice of our upcoming Chamber events, by registering on our Moving to Portugal database at:


Portuguese Chamber of Commerce in the UK (list-manage.com)