The Portuguese real estate market witnessed significant growth in 2024, with a 51% increase in investment volume reaching 2.387 billion euros, as per data from Savills. This performance reflects the sector’s resilience after a challenging 2023 and reinforces investors’ confidence in its competitiveness. Foreign capital constituted 81% of total investment, mainly from France, Spain, and South Africa.
Retail was the primary driver of growth, accounting for €1.166 billion, an increase of 104% from the previous year. Shopping malls led this segment, accounting for 20% of total investment due to the revival of consumer spending and strategic realignment efforts. Supermarkets followed closely with 19% of invested volume, marked by substantial portfolio acquisitions.
Despite a 15% decrease in investment compared to 2023, hospitality retained its strategic importance, capturing 20% market share. Portugal’s status as a popular tourist destination continues to draw capital for projects in this sector, as indicated by Savills.
Office space also demonstrated robust growth, rising by 94% to €310 million in 2024. This growth can be attributed to the return of in-person work and offices’ renewed role as collaborative spaces and organizational culture promoters.
Industrial and logistics sectors maintained steady growth at 83%. While volumes remain lower compared to other asset classes, the development of new projects and growing interest in modern, efficient spaces indicate a significant investment increase in this sector for 2025.
Looking ahead, the Portuguese market is expected to continue expanding in 2025 with Lisbon and Porto as primary investment destinations. Peripheral and emerging regions like the Algarve and North Zone are gaining attention due to tourism potential and competitive costs.
Savills’ head in Portugal, Paulo Silva, emphasized investors’ focus on modern, sustainable assets aligned with ESG trends. This demand and portfolio diversification are expected to bolster market dynamism in 2025.
The residential sector
In October 2024, the average residential property price in Portugal increased significantly by 12% compared to the previous year, reaching €1,721 per square meter. This is the highest recorded average residential property price in the country.
Over the past few years, there has been a steady increase in residential property prices, with an average annual increase of approximately 9.2% from 2017 to 2023. When adjusted for inflation, the nationwide average residential property price increased by 9.5% year-on-year in October 2024.
Following a decline from 2009 to 2013 due to the impact of the global financial and European debt crises, property prices began to recover in Portugal in 2014. Since then, they have been on an upward trajectory. In 2015, prices increased by 4.9%, 2016 saw a 5.7% increase, 2017 saw a 7% increase, and so on until 2023 when the increase was 5.4%. Currently, house prices are once again growing at an accelerating rate.
The residential construction sector remains stable. During 2023, licensed dwellings increased by 6% y-o-y to 32,053 units, following annual growth of 3.2% in 2022 and 12% in 2021, according to INE figures. However, in the first three quarters of 2024, licensed dwellings fell slightly by 1.4% to 24,611 units as compared to the same period last year.
Dwelling completions have followed a similar pattern, rising by 3% y-o-y to 20,156 units in 2022 and by 6.8% y-o-y to 21,534 units in 2023. In the first half of 2024, completions rose by another 3.2% to 12,193 units as compared to the same period last year.
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