Europe’s Real Estate in 2025: Why Portugal Is a Top 5

October 9, 2025

If you’re searching for opportunity, security, and lifestyle in European real estate, the numbers are clear: now is the moment to consider Portugal. The latest Eurostat data reveals a remarkable recovery in home sales across the continent—with Portugal climbing into the coveted top five for fastest-growing housing markets.

But what’s fueling this recovery, and what does it mean for buyers, investors, and those dreaming of a new life in the sun? Let’s explore Europe’s real estate resurgence and why Portugal stands out for 2025.

The European Housing Comeback: Sales Surge Back to Life

Across the European Union, 2025 is shaping up to be a watershed year for property. After a difficult period marked by soaring interest rates and inflationary pressure in 2023–2024, the spring of 2025 has brought optimism and energy back to real estate markets from Lisbon to Luxembourg.

According to the latest Eurostat data:

12 EU member states saw an increase in home sales in the second quarter of 2025.
The biggest surges were recorded in Luxembourg (+86.6%), Slovenia (+34.8%), Lithuania (+24.4%), Belgium (+19.2%), and—importantly—Portugal (+18%).
Markets like the Netherlands (+17.5%), Cyprus (+12.6%), France (+10.4%), and Austria (+3.9%) also posted solid gains.
Only Ireland (-10%), Hungary (-5.7%), and Finland (-5.6%) recorded annual declines.

This surge in activity is a reversal from recent years. In 2023, the Eurozone saw a 17.2% decline in total property transaction value as high borrowing costs kept families on the sidelines. House prices in the eurozone dipped by 1.2%—but now, with rates lower and consumer confidence restored, the market has rebounded sharply.

Europe’s Top 15 Property Markets for 2025: Where Sales Are Growing

Country	Annual Growth in Home Sales (Q2 2025)
Luxembourg	+86.6%
Slovenia	+34.8%
Lithuania	+24.4%
Belgium	+19.2%
Portugal	+18.0%
Netherlands	+17.5%
Cyprus	+12.6%
France	+10.4%
Austria	+3.9%
Bulgaria	+2.8%
Spain	+2.5%
Denmark	+2.2%
Finland	-5.6%
Hungary	-5.7%
Ireland	-10.0%

(Source: Eurostat)

Portugal’s position in the top five is more than a statistical quirk. It reflects the nation’s renewed appeal for local families and international investors alike—and positions it at the heart of Europe’s property revival.

Why Are Home Sales Booming in Europe (and Portugal in Particular)?

Several key trends have aligned to create a “perfect storm” for real estate recovery in Europe, and especially in Portugal.

1. Interest Rates Have Dropped

In 2023, the rise of the Euribor and global rates made mortgages much more expensive, pushing would-be buyers to the sidelines. In 2025, rates have dropped back to accessible levels—making property finance realistic again for families and investors.

Pro Tip: Mortgage brokers across Portugal report increased approval rates and growing flexibility from lenders.

Read our Mortgage Guide for advice on securing the best deals as a foreigner or local.

2. Inflation Is Tamed, Purchasing Power Returns

Inflation, which hit historic highs in 2022–23, has eased across most of the EU. Households are feeling the difference in their wallets, with real wage growth returning and cost-of-living pressures subsiding.

In Portugal, stable inflation and a healthy jobs market have made families more confident about long-term commitments.
Across Europe, improved economic sentiment is empowering more people to buy rather than rent.

3. Government Incentives for Buyers—Especially Youth

Portugal stands out for its robust support of first-time and young buyers:

Public guarantees enable young people to access mortgages with lower deposits.
IMT (Property Transfer Tax) exemptions and other tax breaks make homeownership more affordable.
These incentives have unlocked pent-up demand, especially among younger generations who were previously priced out.

4.Quality of Life, Safety, and Climate

Let’s not forget the “Portugal effect”:

Sunshine: With over 300 days of sun per year in many regions, Portugal is a year-round outdoor paradise.
Safety: One of Europe’s safest countries, with low crime rates and a welcoming society.
Lifestyle: World-class cuisine, wine, and a mix of vibrant cities and serene rural escapes.
Work-from-anywhere: A thriving digital nomad scene and reliable infrastructure.

Insider Info: International buyers keep ranking Portugal among the world’s best for expat life, quality of life, and retirement.

Portugal’s Home Sales: Behind the 18% Growth Surge

Portugal’s Growth in Context

In the past year, Portugal has posted an 18% increase in home sales. That’s outpaced all but four other EU nations—and is especially notable given the country’s size and the maturity of its property market.

2025 vs. 2024:

The year-on-year jump signals strong underlying demand, both domestic and international.
A Wide Spectrum of Buyers:

From first-time Portuguese homeowners to expats and international investors, Portugal’s appeal is wide-ranging.

What’s Fueling This Demand?

– Domestic Demand Is Back

Affordable financing and youth incentives are bringing local buyers into the market at the fastest pace since before the pandemic.
Families are upsizing from apartments to houses, seeking more space, gardens, and quality of life—especially after years of remote work and changing priorities.

– International Buyers Remain Strong

Despite policy changes (e.g., Golden Visa restrictions and the evolution of the NHR tax regime), Portugal remains top-of-mind for buyers from the US, UK, France, Germany, and beyond.
The diversity of the international market now includes digital nomads, long-term retirees, and lifestyle buyers—not just investors.

– High-End and Lifestyle Segments

Portugal’s luxury sector continues to attract buyers looking for unique experiences, historic properties, wine estates, and sea-view villas.
Lisbon, Porto, the Algarve, and up-and-coming Alentejo are all hotspots.

Where Are the Hotspots in Portugal?

Lisbon & Greater Lisbon:

Still the beating heart of the country, but now with more activity in suburban belts (Oeiras, Cascais, Sintra).
Porto:

Portugal’s second city is growing in both volume and value—lively culture, gastronomy, and investment-grade returns.
The Algarve:

Golden beaches, championship golf, world-class marinas, and the best climate in Europe. The “California of Europe” for good reason.
Alentejo:

The new “insider’s choice” for those seeking space, rural beauty, vineyard living, and investment value.

See Immo Lusitania’s handpicked featured properties across Portugal.

Real Stories: Who’s Buying in Portugal’s 2025 Market?

Let’s look at some buyer profiles:

Ana & João – First-Time Buyers from Lisbon

Ana and João, both under 30, used Portugal’s new youth mortgage guarantee to purchase a renovated apartment near Lisbon’s creative hubs. Their mortgage is affordable, and IMT exemption made it possible.

Tom & Sarah – Digital Nomads from the USA

After a year traveling Europe, Tom and Sarah chose a villa in the Algarve for its fiber internet, sun, and walkable lifestyle. They bought with support from Immo Lusitania, guided through every step.

M. Dupont – Retiree from France

Having sold a Paris flat, M. Dupont invested in a riverside townhouse in Porto—at a fraction of Paris prices, with better weather and a vibrant community.

Pro Tip:

Portugal’s diversity of locations means there’s something for every lifestyle, budget, and investment goal.

Europe’s Property Recovery: Broader Trends and What’s Next

The Wider European Picture

Across the Eurozone, 2025 has brought a bounce-back not just in sales volumes but in values:

House prices up 2% on average across the euro area after the previous year’s dip.
Transaction values up 4.1%, according to Eurostat.

What’s driving the trend?

Wage growth outpacing inflation.
Governments rolling out buyer incentives.
Investors returning after sitting on the sidelines.
Real estate seen as a safe haven in uncertain times.

Not Everywhere Is Equal

Some countries (Ireland, Hungary, Finland) are still struggling with affordability and sluggish demand. The reasons vary—from local economic weakness to less effective buyer incentives.

Is Now a Good Time to Buy in Portugal? (2025 Analysis)

The short answer: yes, for most buyers.

Why?

Prices are still reasonable compared to many European peers.
Financing is accessible.
Incentives are still available for both local and (in some cases) international buyers.
Inventory is growing—so buyers can choose from more options.

Caveats?

In popular zones (Algarve, Cascais, Lisbon city), bidding wars and fast-moving listings are back.
Non-residents now face a higher IMT (Property Transfer Tax)—but for many, Portugal’s advantages still outweigh costs.

Planning Your Move with Confidence: The Immo Lusitania Advantage

Moving to Portugal?

You need expert advice—especially if buying from abroad. Immo Lusitania provides:

Personalised search and property matching based on your lifestyle and goals.
Full support: from initial viewings to legal checks, negotiations, and closing.
Partnership with vetted local agents, lawyers, and notaries to ensure security at every step.
Renovation and investment support for those wishing to add value.

📖 Download our Buyers Guide for everything you need to know:

Visas and residency
Mortgages and finance
Taxes, IMT, and closing costs
Choosing the right location
Avoiding common pitfalls

💡 Pro Tip: Most of our international clients start here—it’s the best way to avoid costly mistakes and feel fully prepared before signing any contracts.

Why Portugal? A Summary of Strengths

Stability & Safety: Low crime, stable government, and a resilient banking sector.
Climate: The best in mainland Europe for year-round enjoyment.
Culture: From UNESCO cities to hidden rural gems, Portugal blends old and new.
Healthcare & Education: High-quality systems, international schools, and growing medical tourism.
Lifestyle Value: “Luxury for less” compared to other Western European hotspots.

Immo Lusitania: Your Gateway to Portugal’s Top Properties

At Immo Lusitania, every property is handpicked. Our access covers 1,000+ listings from the Algarve to Porto and everywhere between. Whether you want a beachfront penthouse, vineyard estate, or urban pied-à-terre, we have you covered.

Need help right now?

Contact Ferdi, Nadia, or John for a personalised consultation.
Schedule a call via Calendly.
Or WhatsApp Ferdi directly for a fast response.

FAQs: The 2025 European Home Sales Boom & Portugal’s Market

What factors led to the 2025 recovery in European home sales?

Lower mortgage rates, improved wages, and government support have empowered more families to buy homes in 2025.

How did Portugal reach the Top 5 in Europe for sales growth?

Portugal’s blend of affordable finance, buyer incentives, and lifestyle value makes it a prime market for both locals and internationals.

Are house prices in Portugal still competitive?

Yes, even after recent growth, Portugal remains far more affordable than many Western European countries, especially for comparable lifestyle and climate.

Should investors worry about new taxes or policy changes?

While taxes for non-residents (like IMT) are higher, strong demand, solid rental returns, and rising property values continue to attract global investors.

How can Immo Lusitania help me buy safely in Portugal?

We offer end-to-end service: from search to sale, legal due diligence, negotiations, and renovation support.

Ready to take the next step?

Start your Portugal property journey with Immo Lusitania’s expert team. Your dream lifestyle—and investment—await.

Disclaimer: This article is for informational and entertainment purposes only. For legal, tax, or investment advice, consult qualified professionals. Immo Lusitania is your expert partner for buying and investing in Portugal’s booming real estate market.