House prices up 8.89% during the year to Q2 2022

Portugal’s housing market continues to strengthen, due to strong demand and a housing shortage. Property prices in Portugal rose by 8.89% during the year to Q2 2022, a sharp improvement from the prior year’s 3.34% growth. On a quarterly basis, house prices increased slightly by 0.33% in Q2 2022.

All regions of Portugal have experienced significant house price falls during the last 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, after 13 consecutive quarters of y-o-y house price declines. House prices have been continuously rising since.

Construction activity rising again 

As a response to strong demand, residential construction activity is rising again, after slowing sharply in 2020 due to pandemic-related restrictions. During 2021, the number of licensed dwelling permits in Portugal rose by 13.3% to 28,345 units from a year earlier, following a 2.6% growth in 2020, according to figures from the Instituto Nacional de Estatistica (INE). Then in the first half of 2022, dwelling permits increased further by 4.4% y-o-y to 15,558 units.

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 expanded by a healthy 6.9% in Q2 2022 from a year earlier, following y-o-y growth of 11.8% in Q1 2022 and 5.9% in Q4 2021, buoyed by increasing net exports of services, including a strong rebound in the tourism sector. 

Recently, the Bank of Portugal raised its 2022 growth forecast to 6.3%, up from its earlier projection of a 4.9% expansion. Similarly, the European Commission upgraded its economic growth forecast for Portugal to 6.5% this year, from its initial estimate of 5.8%. The economy returned to growth in 2021, registering an expansion of 4.9%, after declining by 8.4% in 2020 – the worst contraction since 1936.