The real estate market in Portugal: prospects for 2025 after a year of challenges and opportunities
The real estate market in Portugal has demonstrated remarkable resilience in recent years, despite economic challenges, changes in tax policies and the evolution of consumer preferences. The year 2024 was marked by a series of distinct dynamics that influenced the various segments of the market for 2025, from residential to the office, retail, industrial and logistics sectors. In 2024, investment in commercial real estate grew by approximately 44% compared to 2023, exceeding 2.3 billion euros, according to data from the consultancy firm CBRE.
As we enter 2025, industry trends reflect the need for adaptation, innovation, and the search for increasingly sustainable solutions.
The real estate market is undergoing transformation, with new dynamics and driven by the growth of various sectors. Investors show a growing interest in diversification, not only in terms of products and segments, but also in the choice of geographies.
Residential Segment
The residential market in Portugal continued to be one of the main driving forces of the economy. In 2024, the demand for real estate, especially in the metropolitan centers of Lisbon and Porto, remained hot, driven by the scarcity of supply and the constant demand from foreign investors.
In this sense, the year closed with a record average value of 2,548€/m2, with 3,078€/m2 in the metropolitan area of Lisbon and 2,401/m2 in the metropolitan area of Porto.
After the slowdown registered in 2023, due to the strong increase in interest rates that put pressure on the affordability of properties (especially for first-time homebuyers), 2024 closes with an appreciation above 12%, which raises very positive expectations for 2025.
We believe that we will see prices stabilize, with a slight increase and appreciation, but with a clear trend of market consolidation. The number of transactions, on the other hand, is expected to stabilize for numbers similar to those recorded in the period prior to the increase in interest rates.
The residential real estate market continues to register strong demand, driven by several factors, such as government incentives for the purchase of housing by young people, combined with a dynamic labor market and the recent drop in interest rates.
In the main metropolitan areas, a determining factor for this trend is population growth, driven mainly by immigration, which reinforces the need for new housing solutions.
International demand is also expected to remain high, with forecasts of increased demand from Brazilian and North American clients, consolidating the attractiveness of the Portuguese market for foreign investors.
In the rental market, 2025 will be more balanced, where the increase in the supply of rental properties, driven by new legislative initiatives, will play a fundamental role. Leasing will be an increasingly sought after option, both by young people and families, as an alternative to acquisition, given the continuous pressure on purchasing power.
Finally, sustainability will also be a highlight, with urban renewal and rehabilitation gaining ground, accompanied by the growing demand for energy efficient buildings.
Office segment
The office market underwent a period of transformation in 2023 and 2024. Teleworking, although it lost some impetus, still continued to influence the definition of workspaces, with companies looking for more flexible options, combining physical and virtual spaces. The search for larger offices with characteristics that favor employee interaction and well-being was one of the trends.
In 2025, we believe that the path will continue to be the flexibility and adaptability of spaces, with an increase in the demand for offices, whether “hybrid offices” and centers of coworking, whether they are traditional offices. Companies are seeking to create conditions for employees to return to the office, a trend that in 2025 will lead to an average stay of 3 to 4 days at the workplace. The sustainability of buildings will also be on the rise, with a growing demand for spaces that have environmental certifications.
Retail Segment
The retail market in Portugal presented challenges in the year 2024, with the growth of online commerce continuing to put pressure on physical establishments. However, the sector showed signs of recovery, especially in the commercial areas of large cities, with an increasing adaptation of merchants to new consumer behaviors. Local commerce and more immersive physical shopping experiences began to dominate the market.
An even greater reconfiguration is expected in the retail sector by 2025. “Shopping centers” and shopping streets will have to evolve, offering not only products, but also experiences, integration with the digital and living spaces, with a growing focus on sustainable and eco-friendly solutions. The investment in digitalization and technologies that integrate the physical and online experience will be one of the keys to the success of the sector.
Industrial and Logistics Segment
The industrial and logistics segment was one of those that benefited the most in 2024, with the continuous search for spaces to store and distribute, driven by the expansion of e-Commerce. Portugal, due to its strategic location and efficient transport infrastructures, saw growth in the construction of warehouses and logistics centers, especially in the north and along the coast.
In 2025, the logistics segment is expected to continue to grow, with a strong emphasis on sustainability. The transition to greener solutions, such as distribution centers with renewable energy and green building practices, will be a priority for investors. In addition, automation and technology will have an increasing impact on warehouse efficiency, with an increase in the use of artificial intelligence and robotics in logistics processes.
Finally, a reference for Data Centers, the digital factories of the future, which will see exponential growth in the country in the coming years, due to our strategic position, close to the main submarine cables, as well as the robust capacity to produce renewable energies.
Trends for 2025
- Sustainability and energy efficiency: in all segments, sustainability will be a central concern, with greater demand for green buildings and energy efficient solutions. The renovation and rehabilitation of old buildings, as well as the construction of new properties with green certifications, will be a growing trend.
- Flexibility and adaptation: flexibility will be essential, particularly in the office segment, where the hybrid model will remain, although with a clear trend of returning to offices. In retail, the adaptation of physical stores to integrate with the digital experience will be fundamental.
- Technology and innovation: digitalization will be a trend present in all segments. From the use of artificial intelligence in the logistics sector to online platforms that will facilitate buying and selling in the residential real estate market.
- Leasing as an alternative: due to the high cost of acquiring real estate, leasing will increasingly be a viable option for many families and companies. The adaptation of public policies to facilitate this model, especially in the residential segment, will be crucial.
The real estate market in Portugal is constantly evolving, and the changes that occurred in 2024 were only a reflection of a changing global scenario.
The 2025 trends point to a more sustainable, adaptable and digitized market, with an increasing focus on flexibility and experience. We believe that, despite economic challenges, the Portuguese real estate sector will continue to be an important pillar of the economy, as it adjusts to the new market requirements and the needs of society.
