This article will introduce you to the current state of the real estate market in Lisbon, as well as the quarterly price changes for properties in the city of Lisbon and the Lisbon District as a whole. We will study in detail the prices for buying houses and apartments, their long-term rentals and short-term tourist rentals.
It is important to note the geographical features: the District of Lisbon (Distrito de Lisboa) consists of 16 municipalities and includes the city of Lisbon (Concelho de Lisboa), which is divided into 24 districts. This district has an impressive area, and naturally some municipalities are far from the capital, Lisbon. How much the cost of real estate varies depending on its distance from the city of Lisbon, you can learn from this material.
Dynamics of real estate prices in Lisbon Region
You can start to navigate the state of affairs with the data provided on the Idealista.pt website, which is one of the leading portals for searching for real estate in Portugal. One of the key indicators on Idealista is the average price per square meter of real estate for sale and rent.
A quick glance at both charts clarifies that there were no significant changes in real estate sales during the year, while in the case of rentals, there was a steady increase. Whether this is actually the case, we will find out thanks to the detailed analysis below.
Sale of real estate in the municipalities of Lisbon Region
The above table contains information about the average prices per square meter of properties advertised for sale on Idealista.pt (first three columns). The fourth column shows the price change over the last three months in percentage terms: by how many percent it increased or decreased. The fifth column shows the change for the current calendar year. The municipalities in the table are arranged in descending order of average price per square meter in July 2023.
The municipality of Lisbon is the leader in the cost of real estate, with a square meter for 5,349 euros. When comparing with the data for May, it is noticeable that prices increased by a modest 0.91%, and for the year the total increase amounted to only 7%. Following Lisbon is Cascais, located on the ocean coast, where there are residence of the President of Portugal, private international schools, casinos and other signs of prosperity. The average price per square meter in July 2023 was 4,592 euros, slightly lower, by 0.2%, than in May of the same year. Nevertheless, the annual price increase (since July 2022) was 11.1%.
In third place with a large gap is the municipality of Oeiras with an average cost per square meter in July at 3.968 euros. The quarterly price growth in this municipality amounted to 2.98%, and the annual growth was quite impressive 17.7%.
It is interesting to note that the 3 most expensive municipalities of the Lisbon District are very far from each other: a square meter in Lisbon is more expensive than a meter in Cascais by at least 700 euros. A meter in Cascais is more expensive than a meter in Oeiras by almost 600 euros. But a meter in Oeiras is more than 1,000 euros more expensive than in the next municipality, Odivelas!
In turn, Odivelas is in the group of municipalities with an average cost per square meter of 2,000 to 2,700 euros. Loures, Amadora, Mafra, Sintra, Vila Franca de Xira also fall into this group. Prices per square meter in these suburbs of Lisbon for the last three months did not change much: somewhere they slightly increased, somewhere – slightly decreased. Annual price growth in these suburbs was also very modest, from 1.8 to 10%.
Rounding out the list is a group of municipalities with an average cost per square meter between 1,000 and 1,800 euros: Cadaval, Azambuja, Sobral de Monte Agraço, Alenquer, Arruda do Vinhos, Lourinhã and Torres Vedras. Here, the quarterly changes were also insignificant (from -2.68% to + 4.42%). But if we look at a year-on-year breakdown, this group includes the 3 champions of year-on-year growth: Lourinhã (21.1%), Alenquer (22.9%) and Sobral de Monte Agraço (22.5%). How long they will remain the "cheapest" suburbs of Lisbon at these growth rates is a big question.
How much can we trust the information from Idealista.pt?
The Idealista.pt website provides statistics based on the listings of residences for sale only on this platform. Of course, the presence of offers for sale at a certain price does not guarantee that the property will be purchased at the same price. It should also be considered that some objects may be sold without placing information on this web resource. To assess the accuracy of the data provided, it makes sense to refer to the report of the National Institute of Statistics of Portugal, which contains information on real transactions.
This institute periodically publishes detailed quarterly reports. The latest available data is for the first quarter of 2023 (January-March). We will not be able to learn anything about the state of affairs in the summer of 2023 from this report, but we will be able to compare the data for the first quarter with the data from Idealista.pt. This allows us to assess how close to reality the numbers presented on Idealista.pt are. As an example, let's look at a few municipalities in the Lisbon Region.
The table shows the actual average price per square meter in sales transactions, according to the National Institute of Statistics (column 1), the average price per square meter from ads on Idealista.pt (column 2), and the percentage difference between these values (column 3).
The table shows that in the first quarter of 2023, the average cost per square meter in transactions was lower than that indicated by sellers on Idealista.pt. In the case of the municipality of Lisbon, the difference was 25.81%, Oeiras 21.04% and Cascais 19.41%. At the same time, in some municipalities the difference was minimal, such as 0.7% in Odivelas and 1.38% in Loures.
The discrepancy between the average prices per square meter of real estate on Idealista.pt and in the report of the National Institute of Statistics may have several reasons. One of the main ones is the difference in the methods of calculating average values, which excludes a complete coincidence of data. Furthermore, The transaction object may have been posted on Idealista in a previous period and was taken down. A delay in the transaction may also affect the inclusion of the value in Idealista's statistics for that quarter. It is possible that only properties where sellers were willing to offer a discount may have been reflected in the statistics. In addition, the owners may have started with an overpriced offer, expecting a subsequent reduction at the conclusion of the transaction.
Why do we rely on statistics from Idealista.pt? Simply because it is the only source of up-to-date data. Lacking more accurate tools, these statistics can be used for a quick and tentative assessment of the current situation. However, it is important to remember that in a real transaction, conditions may differ significantly from the sellers' original statements. We focus on this data, but always keep in mind that the prices on the website are only the sellers' initial requests.
Long-term rental of real estate in the municipalities of Lisbon Region
The list of suburbs with rental data is shorter than the list of suburbs with sales data. It is likely that from May to July, this site did not receive rental offers for all Lisbon suburbs.
Lisbon is again in the lead, with an average cost per square meter in July of 20.1 euros. Compared to May, there is a slight increase of only 2.55%, but compared to July 2022, the increase is an impressive 35%.
In second place is Cascais with a price per square meter in July of 19.7 euros, which is quite an impressive increase compared to May (10.06%). The annual price increase in Cascais was also significant – 30.1%.
In most of the other municipalities surveyed, rents have increased significantly since May, while the annual growth rates are quite surprising. Except for Mafra, where the price rose by only 8.6%, the other municipalities showed increases ranging from 18% to 41.2%. For those considering buying a property with a view to long-term renting, this may be an interesting observation.
Daily rental properties in the municipalities of Lisbon Region
Given that Lisbon attracts many tourists, potential real estate buyers may be interested in evaluating the various municipalities in terms of short-term rentals for tourists.
For example, All The Rooms service helps to make a preliminary estimate of potential income from short-term rentals, depending on the location and size of the dwelling. For forecasts, this service uses data on the average daily rental cost of similar accommodation in the area, as well as its occupancy rate. We will use the free version of the service, which provides information on the average cost of rent per day in different municipalities of Lisbon Region for the last 3 months.
The table shows the number of properties published on the AirBnB travel rental service between May 13 and August 13, 2023, as well as the average price of 1 night's rent for that accommodation.
Unlike Idealista.pt, All The Rooms service does not provide information on rental costs per square meter. The average values presented in the table refer to all possible rental properties, including both villas and studios.
The city of Lisbon remains the absolute leader in terms of affordable rental properties. However, in terms of the cost of tourist rentals, it is behind several municipalities. Interestingly, this quarter the average price per night in Lisbon and Cascais equalized, while prices in Sintra, another popular tourist destination, became lower than in Lisbon.
Real estate for sale in different neighborhoods of Lisbon city
The above table shows the average prices per square meter of properties advertised for sale on Idealista.pt (columns 1-3). Column 4 shows the percentage of change in prices over the three months: how much they increased or decreased. Column 5 shows the change over the calendar year. The Lisbon districts in the table are ordered by decreasing average price per square meter in July 2023.
The most expensive area in terms of price per square meter is consistently Santo António, a small (1.5 square kilometers) and densely populated area in the very tourist center of Lisbon with a population of about 11,000 people. In this neighborhood are such famous places as the Marquês de Pombal Square and the Avenida da Liberdade (Avenue of Liberty). The average price per square meter is 7.763 euros, which is the result of a slight drop in the quarter (-0.5%) and a slight year-on-year increase (4.6%).
This area is followed by the nearby Estrela, Avenidas Novas, Misericórdia, Campo de Ourique, Parque das Nações, Belém, Campolide, and Santa Maria Maior with prices of 6,000 - 6,600 euros per meter. These areas are either in or adjacent to the historic center itself. Although some of them lie outside the center, such as Parque das Nações (Park of Nations), a modern district in the west of the capital. These are all prestigious neighborhoods, rich in attractions and attracting many tourists. Presumably, buyers of real estate in such places are business or investment-oriented. Average prices per square meter in these areas have either slightly increased or slightly decreased compared to May 2023. During the year, these areas showed a moderate increase in prices per square meter or even a drop. The Estrela neighborhood stands out from the crowd, with a 14% annual growth rate, making it one of the leaders in terms of growth rate.
Next are the districts with prices from 5,000 to 6,000 euros per meter: Alvalade, Alcântara, Arroios, São Vicente, Areeiro. They are located in the center of the city. These areas may be of interest both for those who want to buy property for personal use and for those who consider them from the perspective of tourist business. The changes in property prices in these neighborhoods have been quite varied both over the last 3 months and over the year. The most significant annual price changes among all Lisbon neighborhoods are observed in this group. In Alcântara district the cost per square meter fell by 16.4% compared to the previous year, and in São Vicente district the average cost per square meter for the year increased by 15.1%.
The list of areas where the price per meter ranged from 4,000 to 4,700 euros: São Domingos de Benfica, Benfica, Penha de França, Ajuda, Carnide, Lumiar, Beato and Santa Clara. Among them, there are both peripheral areas and those closer to the center. In the vast majority of them, prices have risen slightly compared to May. And on a year-on-year basis, most of them showed moderate growth, while only one of them, Carnide, showed a 10.1% decline since last July.
Rounding out the list are 2 districts with a cost per square meter between 3,400 and 4,000 euros: Marvila and Olivais. The latter includes Lisbon Airport and the other three are located around it. In these areas, the price per square meter has slightly increased since last July, by 3.3-4.6%.
Let's now take a look at the rents in these areas of the city.
Rental properties in Lisbon city districts
The table shows that prices for long-term rental real estate are growing at a cosmic pace. Quarterly changes are not so homogeneous: in some districts there was a moderate growth, in some districts there was a high growth, and in some districts there was even a decrease in prices.
Meanwhile, since last July, price increases across all districts have ranged from 13.5% to 50.9%.
Interestingly, the areas with the highest rental rates often coincide with areas where the price per square meter for sale is also high. This list includes Santo António, Santa Maria Maior, Misericórdia, Estrela and Campo de Ourique. The most impressive annual rental rate increases were recorded in the neighborhoods of Arroios (50.9%) and Penha de França (48.3%).
Daily rental properties in Lisbon
Let's turn again to All The Rooms service to evaluate the potential of different neighborhoods in Lisbon for short-term tourist rentals. The table below shows the number of properties published on AirBnB between May 13 and August 13, 2023, as well as the average price of 1 night of rent for this accommodation.
The data presented is not related to the average cost per square meter of housing, but refers to all rental properties during this period, including different types of housing such as penthouses and rooms.
According to this data, the most expensive neighborhoods for tourists visiting Lisbon in summer include Parque das Nações (169.28 euros), Estrela (149.04 euros), Marvila (143.52 euros) and Santo António (140.76 euros). It is also interesting to note that the Arroios area offers the largest number of properties for daily rentals (1,342 tourist accommodations).
It is noteworthy that some neighborhoods are not represented on All The Rooms (in the table, the data about them is marked as N/A). This may be because some data may not be available in the free version of the service.
The most expensive and cheapest properties to buy in August 2023
Today, Idealista.pt portal offers 9,583 residences for sale. However, it is important to note that among them there may be houses under construction, as well as those that are in the design phase or require complete remodeling. Only residences that are ready to live in are included in the overview.
The most expensive in Lisbon Region today
Estate in Mafra on 12 hectares of land. Village house of 1.300 meters, several additional buildings, swimming pool.
Three-story house of 1,709 square meters located on a plot of 5,600 square meters. 7 bedrooms, 5 bathrooms. No energy efficiency certificate. Located in the municipality of Oeiras.
Minimal prices on finished homes that you can live in without having to start major renovations right away:
One-story house of 62 square meters. One bathroom, 1 bedroom, terrace. No energy efficiency certificate. Located in the municipality of Lourinhã.
One-story house of 62 square meters. Two bedrooms and one bathroom. Built-in closets, attic. No energy efficiency certificate. Municipality of Cadaval.
The most expensive houses in the city of Lisbon
The houses featured in the spring price survey. Apparently, there were no connoisseurs of such beauty.
Palace in Estrela neighborhood. The area of the house is 950 sq. m., the area of the plot is 2.335 sq. m. 9 bedrooms, 2 bathrooms. Energy efficiency class D.
Mansion with windows on the Cathedral of Lisbon. Area 961 sq. m., 5 floors. Elevator, garage, central heating. Building of the 18th century. The decoration is kind of something "rich". I suspect it's for sale with furniture. Perhaps someone might want to turn it into a hotel. Santa Maria Maior neighborhood.
The lowest prices for ready-made houses in Lisbon city, where you can live without starting major renovations immediately
A microscopic house (only 23 square meters) with one bedroom and one bathroom. No energy efficiency class. Campolide neighborhood.
An even more microscopic cabin (15 square meters) with a bed in the mezzanine. A bathroom is available. Site license for tourist rentals (Alojamento local). Energy efficiency class C. Neighborhood Misericórdia.
Two-story house of 60 square meters. 2 bedrooms and 2 bathrooms. Recent renovation, but nothing special. No energy efficiency certificate. Marvila neighborhood.
Let's take a look at the apartments, of which 25.029 are offered on the portal. For example, let's take T2, which is an apartment with a living room and 2 bedrooms. In the review, I include only properties that are ready for residency.
The most expensive apartments:
A duplex of 256 square meters on the fifth floor in a house without an elevator. 2 bedrooms, 1 bathroom. View of the Tagus River. Energy efficiency class C. Lisbon, Santa Maria Maior neighborhood.
Apartment in a house built in 2022. The area is 191 square meters. 2 bedrooms and 3 bathrooms. 10th floor. The building has an elevator and a garage. Energy efficiency class B. Lisbon, Santo António neighborhood.
When searching for the cheapest apartment options, the first ads shown first are those with apartments closed for viewing, apartments with tenants and apartments of which only a part is for sale. There are also more options without a residential license. All of these options I will not show.
Adequate options for living start at:
Apartment of 62 square meters on the 11th floor. The building with an elevator was built in 1982. 2 bedrooms, 1 bathroom. Energy efficiency class E. Municipality of Vila Franca de Xira.
A duplex with an area of 104 square meters. Located on the 3rd floor, there is no elevator in the house. 2 bedrooms, 1 bathroom. Balcony. There is a garage in the house. The house was built in 2003. Energy efficiency class D. Municipality of Alenquer.
If we mention apartments in the city of Lisbon, more or less decent options start from:
Apartment of 65 square meters. 2 bedrooms, 1 bathroom. 2nd floor, building without an elevator. Energy efficiency class C. Santa Clara neighborhood.
Duplex of 54 square meters. 2 bedrooms, 1 bathroom. 5th floor, house without elevator. Energy efficiency class E. Ajuda neighborhood.
Apartment of 90 square meters. 2 bedrooms, 1 bathroom. 3rd floor, building without an elevator. No energy efficiency certificate. Santa Clara neighborhood.
What conclusions can be drawn about the state of the Lisbon real estate market this summer?
Lisbon and its surroundings are the most attractive places to live in Portugal. Prices for long-term rentals are rising faster than prices for apartments and houses for sale. This trend is particularly noticeable both in Lisbon itself and in the surrounding municipalities, although of course, it is more pronounced in Lisbon itself. Property owners are trying to sell their properties for as much as possible, most likely counting on wealthy foreigners as buyers. However, data from the National Institute of Statistics indicate that the actual sales prices may be lower than those indicated by sellers in the advertisements.
When comparing the offers on Idealista.pt with what we had in spring, we can see that the most expensive properties from the spring price overview are still unsold. At the same time, the list of the cheapest objects has been completely updated. It seems that the cheapest segment of housing in the suburbs is getting more expensive and "shallow": houses with the area of 20 square meters, 15 square meters.... The feeling is that soon they will offer matchboxes for 200 thousand euros.
As the summer real estate market review shows, prices for houses and apartments in Lisbon and its surroundings are not going to fall. And this is logical, as rental prices – both long-term and tourist – continue to rise.
If you are ready to buy, WithPortugal.com has a professional real estate agent in Lisbon who can help you find the best solution for your individual situation.
Best wishes for you to find your perfect accommodation in Lisbon!
Translated from Ukrainian by Rodion Shkurko