It’s February, and the cold weather in Portugal seems to be ending. In some places, it's already +20 during the day. As we anticipate the hot summer, it's an excellent time to dream about enjoying a cup of coffee on a terrace overlooking Lisbon. Beautiful! But first, it's a good idea to understand what's happening in the real estate market.
In this article, you will learn how the Lisbon real estate market has changed over the winter, what options are available now, and what prices you should expect if you consider buying an apartment or house in Lisbon.
First of all, let's define what we call Lisbon. The district of Lisbon (Distrito de Lisboa) comprises 16 municipalities, one of which is the city of Lisbon (Concelho de Lisboa). You must consider this fact when looking for real estate because the district is large, and the prices vary greatly from municipality to municipality. The Lisbon municipality itself is divided into 24 areas. Below we will detail the real estate prices for each.
Dynamics of real estate prices in the Lisbon district
We will start our analysis with Idealista.pt, one of Portugal's leading real estate search websites. Since it's still February, we will analyze November, December, and January.
At first glance at the graphs, the change over the year is not significant in terms of sales, but rents have steadily increased throughout the year. We will now look at what's happening at the municipal level.
Property for sale in the municipalities of Lisbon district
As we can see, the price per meter is the highest in the municipality of Lisbon, €5,116 per square meter in January 2023. But it is even slightly down from November 2022, and compared to January 2022, the increase is only 2.5%. The next most expensive after Lisbon is Cascais, known for its beaches, the residence of the President of Portugal, private international schools, and other attributes of the good life. The average price per square meter in January 2023 was €4,454, 2.75% higher than in November 2022 and 15.1% higher than in January 2022.
Prices per square meter in the other suburbs of Lisbon over the past three months have changed in different ways, somewhere even downward, but for 12 months there is a considerable increase, up to 28% in all of them, as in Lorinha.
It is interesting to compare this with the dynamics of rental prices.
Property for rent in the municipalities of Lisbon district
The list of suburbs is shorter here. Apparently, for November 2022 to January 2023, this site only had rental offers in some of Lisbon's suburbs. In terms of price per square meter of rental housing, the municipality of Lisbon again leads with €18.3 per square meter (average) in January 2023. The increase compared to November last year was 5.78%, and since January 2022, the price has increased as much as 35.5%!
Interestingly, the situation is very similar in Cascais: €18.1 per square meter, up 5.23% since November, an annual increase of 32.9%. At the same time, the average price per square meter for the sale of housing is almost €600 lower than in Lisbon. If someone considers buying a home for rent, they should consider this fact.
To what extent can we rely on the data of Idealista.pt?
The site Idealista.pt gives us some statistics, but it is essential to understand that these statistics are based on the offers on this site. It is possible that someone is selling a home without posting there and that the price at the time of the transaction will differ from the originally offered. To check if you can trust the numbers from Idealista.pt, it is a good idea to look at the information on the transactions that have taken place. There is such information, and it is available on the website of Portugal’s National Institute for Statistics.
Statistics Portugal publishes reports quarterly. Because they are very detailed, they cannot be generated quickly. Today's latest one covers the third quarter (July - September) of 2022. So, unfortunately, we can't know right now how Lisbon real estate has been doing this winter. However, we can compare the available data for the third quarter from both sources. It will give us an idea of how close the figures we now see on Idealista.pt are to reality. Let's take a few municipalities in Lisbon County as an example.
Comparison of prices per square meter in Lisbon County municipalities for sales in Q3 2022, Idealista.pt and Ine.pt
As we can see from this comparison, for sales transactions in the third quarter of 2022, the average price per square meter was lower than what the sellers asked for on Idealista.pt. In the case of the municipality of Lisbon, this difference was almost 29%, and in Cascais nearly 19.5%.
There could be several explanations. First, it is essential to mention that the methods of calculating average values differ between the Institute of Statistics and Idealista.pt, so we would never have seen a complete overlap of the numbers.
Second, the property with which the deal was made could have been published on Idealista in a previous period and was, at some point, removed from publication. Preparations for the agreement may have been stretched out, so we can't know if its value hit Idealista's stats just this quarter.
Thirdly, we do not exclude the possibility that only those properties where the owners were willing to offer a discount reached the deal. And, of course, it is possible that when the owners posted the property on the site, they overestimated the price, taking into account the possible bargaining and, in most cases, reduced the price.
So it is possible to rely on the Idelista.pt statistics, but with reservations. It will do for the rapid and approximate evaluation of the current situation without more accurate tools. But you have to remember that the conditions may differ significantly from those the seller initially declared. Since we need to assess the current situation, and it does not make sense to wait three months to see the report of the Institute of Statistics for the 4th quarter of last year, we will continue to be guided by data from Idealista.pt.
The dynamics of property prices in the municipality of Lisbon
Property for sale in different areas of Lisbon
The most expensive area is Santo António. It is the heart of Lisbon and has an area of only 1.5 square kilometers with a population of 11,000 people (seriously, how can they fit in there?). In this area, there are Plaza Marquês de Pombal and Avenida da Liberdade. The average price per square meter is €7,630.
The neighborhood is followed by neighboring Alcântara, Avenidas Novas, Misericórdia, Belém, Estrela, and Campolide, with prices starting at €6,000 per square meter. It is also a tourist center. Whoever buys an apartment there will be surrounded by sights such as the Gulbenkian Museum, the Elevador da Bica cable car, the Belém Tower, the Mosteiro dos Jerónimos, the Museum of the Orient, the National Museum of Ancient Art, and many others. But most likely, in these areas, real estate is bought for use in the tourism business.
Notably, the average price per square meter in almost all of these areas has changed since November 2022. But compared to January 2022, it has definitely increased in all of them.
Then there are areas with prices of €5,000 per meter and more: Campo de Ourique, Santa Maria Maior, Parque das Nações, and Alvalade. They are also very prestigious. For example, Santa Maria Maior is part of the historical center, full of attractions (Santa Justa elevator, Cathedral, Praça do Comércio, etc.) and, consequently, tourists. Alvalade is the location of the University of Lisbon. Parque das Nações (Park of Nations) is a trendy neighborhood west of the capital. That is, these areas are attractive both in terms of shopping for themselves and in terms of tourist business. As we can see, the change in property prices in these areas has not been homogeneous in the perspective of 3 months or a year.
The list of areas where the price per meter in January was between €4,000: Arroios, Carnide, Areeiro, São Domingos de Benfica, Benfica, São Vicente, Beato, Ajuda, and Penha de França. Among them are both peripheral areas and those closer to the center. Most of them had lower prices compared to November, but in the year's perspective, there was still an increase, somewhere even quite tangible, as, for example, by 31.4% in Beato.
And the final four areas with a price per meter of €3,000 and more are Lumiar, Marvila, Santa Clara, and Olivais. The last includes Lisbon airport, with the other three areas around it. The proximity to the airport generally makes these areas not the most comfortable to live in because of the constant noise, although many other factors affect the attractiveness of the area and the level of property prices in it. For more details, you can ask a professional real estate agent if you decide to buy an apartment or a house.
Just like in the previous groups, we can observe a specific decrease in prices compared to November and, at the same time, an absolute increase from January 2022. By the way, Lisbon's champion of price increases over the past year is in this last group. It's the Santa Clara district, where the price per square meter has increased by almost 36% since January 2022.
So what's happening to rents in Lisbon?
Real estate rentals in Lisbon neighborhoods
The dynamics of rental prices are clear: they go up everywhere. Even though the price has fallen slightly in some areas since November 2022, on a year-on-year basis, all Lisbon districts show an increase.
The list of districts with the highest rents in many positions coincides with the list of areas with the highest cost per square meter when selling. These are Santo António, Santa Maria Maior, Misericórdia, Estrela, Campo de Ourique. Interestingly, the champion in terms of annual growth in price per rental square meter (52.5%) is the Ajuda neighborhood, near the end of the list of the most expensive real estate for sale. Again, this is a reason to ponder for those who want to buy a home for long-term rental and those choosing between buying and renting.
The most expensive and cheapest real estate available in February 2023
Idealista.pt currently offers 7,655 homes for sale, some under construction, some even in the design phase, and some as ruins that need to be rebuilt. Unfortunately, no filter shows actual ready-to-live homes, so you'll have to look carefully at all the listings.
Of the finished homes, the most expensive in Lisbon County today:
€15,000,000 An estate in Mafra on 12 hectares. Village house of 1.300 meters, several additional buildings, swimming pool.
€12,500,000 Former royal residence, built in the mid-19th century, measuring 1.700 square meters. Oak furniture, columns, high ceilings and huge fireplaces. A 5.6 hectare plot. River view. Located in the municipality of Oeiras.
You can find half-ruined houses starting from:
€12,000 A half-destroyed small house of 68 square meters on a plot of 122 meters. Village in the municipality of Torres Vedras.
Minimal prices for complete houses in which you can live without having to start a major renovation immediately:
€105,000 Three-storey house of 80 square meters, without plot. Located in a village in the municipality of Alenquer.
€110,000 Two-storey townhouse of 90 square meters in a village north of Cadaval.
The minimum prices for homes in the Lisbon municipality with a visually more or less decent repair
€135,000 Two-storey house with basement in Marvila, 64 square meters.
€215,000 Two-storey house with one bedroom. The total area is 45 square meters, and the plot is 10 meters. It was built in 2019, so the interior looks fresh and clean. Nevertheless, it is more of a house for rent than for family life. Located in the area of Campo de Ourique.
€250,000 Freshly renovated two-story house of 50 square meters on a plot of 86 square meters. 2 bedrooms, terrace. Of all the cheap options described before, this is the only one with nothing to complain about, at least in the photo. The Campolide area.
Let's look at the 24.225 apartments the portal offers. For example, let's take T2: apartments with a living room and two bedrooms.
The most expensive apartments:
€2,288,800 An apartment of 133 square meters with two parking spaces. Sixth floor, building with elevator. Terrace with views. Kitchen and bathroom in a minimalist style. Energy efficiency class A. Lisbon Santo António.
€2,150,000 An apartment in a luxury new building (only 6 neighbors). Surface area of 256 square meters. Own plot in a fenced garden. It seems that the house is not yet completed or at least not commissioned. Lisbon, Avenidas Novas
When searching for the cheapest options, the first shown are listings with apartments closed for viewing, apartments with tenants, and apartments of which only part is for sale. Of the illustrations, there are only exterior pictures. I don't consider those options.
Adequate options for living start from:
€85,000 Apartment renovated 70 square meters. Energy efficiency class E. Located in the municipality of Azambuja. Near the railway station.
€94,000 An apartment of 86 square meters on the 6th floor. House with an elevator was built in 1993. Energy efficiency class D. Municipality of Cadaval.
€97,500 An apartment of 75 square meters. It may need redecoration. Located on the 4th floor, there is no elevator in the building. No energy efficiency certificate. The municipality of Vila Franca de Xira.
When it comes to apartments in the municipality of Lisbon, more or less decent options start from:
€139,000 A newly renovated apartment on the third floor. House without elevator, built in 1999. Area of only 48 square meters. Energy class D. Santa Clara area.
€152,500 Apartment of 67 square meters. It needs at least a facelift (unless, of course, the buyer is a fan of pink walls). Energy efficiency class D. Santa Clara neighborhood.
What can be said in summary about the Lisbon real estate market this winter?
Lisbon and its surroundings are undoubtedly the most desirable locations for living and investing in Portugal. Knowing this, property owners are trying to squeeze as much as possible out of the market. While the average price per square meter in the city has changed in recent months downwards, the suburbs, on the contrary, have instead shown an increase. This growth is even more noticeable if you compare prices with last January. It is based on data from Idealista.pt.
The data from the National Institute of Statistics help us to understand that actual sales will still be at slightly lower prices than we saw on Idealista.pt.
I want to share another exciting result from the Institute of Statistics report. In the third quarter of 2022, the average cost per square meter of housing sold to tax residents in Portugal was €2,128, while housing sold to tax residents in other countries was €3,511. Does this mean that foreigners are initially trying to sell at a higher price, are less likely to bargain, or that foreigners are initially targeting more expensive housing than locals? I don't have an answer to that question.
May your dream of a comfortable home in Lisbon come true soon!