House prices up 6.27% during the year to Q1 2021

Portugal’s housing market continues to grow, albeit at a slower pace amidst the economic repercussions caused by the COVID-19 pandemic. Property prices in Portugal rose by 6.27% y-o-y in Q1 2021, down from the previous year’s 10.29% growth. On a quarterly basis, house prices increased 1.86% in Q4 2020.

All regions of Portugal experienced significant house price falls during the previous decade and despite some recovery in 2009, house prices started to fall again in the last quarter of 2010. Prices only began to recover in Q4 2014, but have been continuously rising since.


Construction activity slowing. 

Growth in residential construction activity has weakened sharply since last year, mainly due to the COVID-19 pandemic. In Q1 2021, the number of licensed dwelling permits in Portugal rose by 3.1% to 6,569 units from a year earlier, following a 2.6% growth in 2020, according to figures from the Instituto Nacional de Estatistica (INE). This is a sharp slowdown from annual growth of 18.4% in 2019 and 43.5% in 2018.

Rents, rental yields: yields are good in Lisbon, at around 5.45%  

Lisbon apartment costs around €3,830 per sq. m.

Portugal: typical city centre apartment buying price, monthly rent (120 sq. m)
  Buying price Rate per month Yield
Lisbon € 300,000 € 1,578 5.45%

Recent news: The Portuguese economy shrank 3.3% during the latest quarter, after a strict lockdown imposed in January. Year-on-year, the economy contracted by 5.4% in Q1 2021, following a 7.6% decline last year - the worst contraction since 1936. As a result, the government recently cut its 2021 economic growth forecast to 4%, from the initial 5.4%.