The Housing Crisis in Portugal - Current Market Situation
Over the last decade, Portugal has become a hotspot for international investors, particularly in real estate. With a growing foreign population and thriving tourism industry, demand for properties has skyrocketed. Foreign residents now account for 10% of Portugal's population, driving up demand for both short-term and long-term rentals.
Eurostat reports that housing prices in Portugal have surged by 106% between 2010 and 2024, far outpacing the European Union's average. The report describes that the last 14 years have seen significant increases in property values across many EU nations, and comparing the second quarter of 2024 to 2010, house prices rose more sharply than rents in 20 countries. Notably, property values more than tripled in Estonia (+232%) and Hungary (+218%), while doubling in countries like Lithuania (+178%), Latvia (+146%), Czechia (+131%), Austria (+111%), Portugal (+106%), Luxembourg (+103%), and Bulgaria (+102%).
In Portugal, cities like Lisbon and Porto have seen some of the steepest increases, fueled by limited supply and soaring demand. In Lisbon, for instance, foreign buyers pay a median of €4,958/m², nearly double what domestic buyers pay, reflecting the increasing competition for prime locations.
The gap between supply and demand is stark: only one house has been built for every ten sold since 2018. The official report from INE (Statistics Portugal), released on 22nd October 2024, informs that the median property price in Portugal reached €1,736/m² in 2024, marking a 6.6% increase from the previous year. Sub-regions like Viseu Dão Lafões experienced an astounding 17.2% growth, highlighting the diverse opportunities across the country, not only the main cities.
More Than a Year Later: The End of the Portuguese Golden Visa Real Estate Option
In October 2023, the Portuguese government introduced the "Mais Habitação" (Housing Bill) in an effort to combat speculation and rising rents. The bill aimed to regulate the market and increase supply by ending the Golden Visa real estate option, however, its effectiveness has been widely criticized. The fact is that the Housing Bill failed to address the root causes of the housing crisis.
Critics, including Lisbon’s mayor Carlos Moedas, argued that the bill lacked practical solutions and consultation with local authorities. In 2024, a newly elected Portuguese government also pointed out the inefficiency of the Bill and announced a 4-Year Executive Plan aimed at boosting housing supply and revising ineffective policies. Key initiatives include:
- Creating real estate funds in partnership with banks.
- Easing construction restrictions to promote high-rise and dense urban developments.
- Offering tax exemptions for first-time homebuyers under 35 (including foreigners).
These measures reflect a shift toward pragmatic solutions to address Portugal's housing shortage and rising property prices. As 2024 comes to an end, the new government measures are starting to pay off.
Portugal Golden Visa: Misplaced Blame in the Housing Crisis
When the Golden Visa real estate option was discontinued in October 2023, portrayed as the responsible for the housing crisis, it was clear to the industry and real estate specialists that the measure would not solve anything. The reality is that this program contributed over €7 billion to Portugal’s economy, with real estate accounting for over 90% of this amount during its 11-year duration (from September 2012 to October 2023). It played a vital role in urban regeneration, particularly in cities like Lisbon, Porto, and the Algarve region.
The housing crisis in Portugal is deeply tied to structural issues, such as insufficient housing stock and booming tourism. For example, in Lisbon alone, tourist overnight sleeps increased from 13.1 million/yearly in 2006 to over 55 million until August 2024, exacerbating housing demand. The Golden Visa program was merely a scapegoat, with little evidence linking it to the crisis.
Property Investments with Investment Visa: Exploring Diverse Pathways
At Investment Visa, we connect international investors with Portugal’s vibrant real estate market while exploring pathways to residency through programs such as the D2 Visa for entrepreneurs and the D7 Visa for individuals with passive income. While the Golden Visa no longer includes real estate as a qualifying option, investing in property remains a smart strategy for those planning a move to Portugal or seeking profitable returns in a resilient market.
Exclusive Projects Backed by Market Expertise
Portugal's real estate market continues to thrive, offering unique opportunities for investors. With an increasing population and robust demand for short-term and long-term rentals, the market remains highly attractive. At Investment Visa, we provide access to premium projects, including modernized off-plan developments in Lisbon, luxury villas in the Algarve, and thriving rental apartments in Porto.
Our team of experts ensures a seamless investment process, addressing the complexities of property acquisition, taxation, and compliance with Portuguese regulations. Whether you are seeking a family home, a vacation property, or a rental income generator, our curated portfolio ensures you invest in properties with high yield potential and long-term growth.
Leveraging Real Estate to Complement Residency Goals
While real estate is no longer a direct pathway to the Golden Visa, it complements other visa options such as the D2 Visa and the D7 Visa, both of which provide attractive residency benefits.
D2 Visa for Entrepreneurs: Ideal for individuals establishing or relocating a business in Portugal, the D2 Visa can pair effectively with property investments, enabling you to settle in Portugal while capitalizing on the country’s economic growth. Purchasing commercial real estate or mixed-use developments may align with business requirements, strengthening your visa application and creating a sustainable business base.
D7 Visa for Passive Income Holders: Designed for retirees or individuals with steady income from pensions or investments, the D7 Visa is complemented well by property ownership. By acquiring a home in Portugal, you gain a residence aligned with your visa conditions while positioning yourself in one of the country’s high-growth real estate markets.
The Strategic Appeal of Off-Plan Investments
Off-plan property developments remain one of the most advantageous investment options in Portugal. These projects modernize Portugal’s urban landscape, address the country's housing shortage, and offer investors properties at competitive pricing. For example, Lisbon faces an ongoing residential housing deficit, with demand far outpacing supply, making off-plan properties a strategic investment opportunity for both rental and resale purposes.
In addition to addressing housing shortages, off-plan properties incorporate modern amenities, sustainable designs, and energy-efficient technologies, making them highly attractive to today’s environmentally conscious buyers. For investors, this translates to strong rental demand, higher resale values, and long-term profitability.
Portugal Real Estate in 2025: Seize the Opportunity
Portugal’s housing crisis has revealed not just challenges but significant opportunities for strategic investors. Rising property values, a high-demand rental market, and alternative visa pathways such as the D2 and D7 programs underscore the enduring appeal of the Portuguese real estate panorama.
At Investment Visa, we combine decades of expertise with a hands-on approach to help you navigate this dynamic market. From selecting the right property to aligning your investment with residency goals, we provide comprehensive support tailored to your objectives.
Contact us today to learn more about Portugal’s property investment landscape and how we can help you secure a profitable future while exploring residency opportunities in Europe.
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