Lisbon Home Prices Up 11.4% Year-on-Year as Second Quarter Outpaces Already Heated 2025

Lisbon apartment prices rose 11.4 percent in the second quarter of 2026 compared with the same period last year, according to data compiled by the Portuguese Association of Real Estate Professionals and Brokers (APEMIP) and cross-referenced with listings aggregator Idealista Portugal. The median asking price for a residential unit in the municipality now sits at €5,340 per square metre — up from €4,795 in Q2 2025 and well above the €3,900 recorded in Q2 2023.

The timing matters. Portugal's Golden Visa programme, stripped of its residential property route in October 2023, was widely expected to cool demand from non-EU investors. Instead, a surge in high-income remote workers relocating from northern Europe — particularly from Germany and the Netherlands — has more than filled the gap. Add a chronic shortage of new supply inside the municipal boundary, where construction licensing approvals fell 18 percent in 2025 according to Instituto Nacional de Estatística figures, and the conditions for sustained price pressure are firmly in place.

Where Prices Are Moving Fastest

Príncipe Real remains the benchmark neighbourhood for premium stock. A renovated two-bedroom apartment on Rua Dom Pedro V changed hands in May for €1.27 million, or roughly €7,100 per square metre — a price that would have seemed extraordinary three years ago. Agents working the Mouraria corridor, historically one of the city's more affordable inner districts, report that T2 units are now routinely listed above €4,600 per square metre, a jump of nearly 14 percent on Q2 2025 asking prices.

The Avenidas Novas district, long favoured by Portuguese professional families and corporate lets, has seen its quarterly growth rate accelerate to 9.2 percent against the same quarter last year — slower than Mouraria but significant given its larger transaction volume. Across the Tagus, Almada's Monte de Caparica seafront, technically outside the Lisbon municipality, is acting as a pressure-release valve: prices there rose 7.8 percent year-on-year but remain around €2,900 per square metre, attracting buyers priced out of the capital.

The rental side is equally pressured. The Lisbon municipal council's Renda Acessível programme, which subsidises affordable private rentals, has a waiting list of more than 4,200 households as of June 2026 — roughly double the figure recorded when the scheme launched. Average monthly rent for a T2 in Arroios hit €1,780 in June, up from €1,540 a year earlier, squeezing tenants who earn median Portuguese wages of approximately €1,450 net per month.

What Buyers and Sellers Should Expect This Autumn

Several factors will shape the market through the end of 2026. Portugal's Banco de Portugal held its independent stress-test rate steady in June, but the European Central Bank's two cuts since January — bringing the main refinancing rate to 2.25 percent — have already pushed 30-year fixed mortgage rates below 3.1 percent at several Portuguese lenders, including Caixa Geral de Depósitos. Cheaper credit is feeding demand at exactly the moment supply constraints are most acute.

APEMIP analysts flagged in their June bulletin that new housing completions within the Lisbon ring road are unlikely to exceed 2,800 units for the full year 2026, against estimated annual household formation of around 6,500. That gap does not close overnight. For buyers, the practical implication is straightforward: waiting for a meaningful correction requires a catalyst — a sharp ECB rate reversal, a serious Portuguese fiscal shock, or a sudden retreat of international demand — that is not visible in current data.

For sellers, the second half of the year historically sees thinner transaction volumes as August empties the city, but prices rarely retreat during the summer lull. The more relevant question is whether the 11.4 percent annual growth rate can sustain itself into Q3. At current trajectory, analysts at Savills Portugal estimate year-end median prices could breach €5,600 per square metre — which would make Lisbon residential property more expensive per square metre than Madrid for the first time on record.