Overview of the Madeira real estate market in the spring of 2023 WithPortugal
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Overview of the Madeira real estate market in the spring of 2023

Madeira, drowning in greenery, seems to be experiencing a boom of interest in its real estate. New apartment complexes are being built in the capital and at the same time every municipality, no matter how small, offers housing for tourists to rent.

In this article, you will learn how the Madeira real estate market has changed over the spring of 2023. We will analyze the prices of buying and selling, long-term and short-term rentals. And also you will be able to see the most expensive and the cheapest houses and apartments that you can buy now.

Price trends in Madeira

We'll start our price analysis with Idealista.pt, one of the main websites to find real estate in Portugal. Consider the data for the last 3 months: February, March and April.


A first glance at the graphs makes it clear that prices per square meter rose in both sales and rentals, but the rate of price increase in sales was more uniform than in rentals. These graphs show the average values for all municipalities in Madeira. Below we will look at each municipality separately.

Property for sale in Madeira municipalities

The table above shows the average price per square meter of property by municipality within the Madeira region, whose listings have been published on Idealista.pt (columns 1-3). Column 4 shows how the price has changed over these three months: by how much it has risen or fallen. Column 5 shows the change over the calendar year. The municipalities in the table are arranged in descending order of average price per square meter in April 2023.


The average price per meter in the entire region in April 2023 was 2.492 euros, the result of both quarterly (by 2.81%) and annual growth (by 20%). The most expensive municipalities have an average cost per square meter between 2,000 and 2,900 euros. This list includes Funchal, Calheta, Ribeira Brava and Ponta do Sol, all located in the south and southwest of the island. They showed a fairly similar rate of growth in the average price per square meter, both for the quarter (from 5.18 to 7.1%) and year (from 25.7 to 31.1%). Interestingly, the island's capital, the city of Funchal, is not the leader in terms of growth. Incidentally, more than 40% of the population of the archipelago lives in Funchal. There are two international private schools, the only university on the island, soccer clubs, and a soccer school.

They are followed by the rest of the municipalities with prices ranging from 1.200 to 2.000 euros per square meter:

  • Located in the southern part of the island of Madeira Câmara de Lobos, Santa Cruz;
  • Located in the North Machico, Santana and São Vicente.

The prices per square meter there changed at different rates. If we talk about the last quarter, there was mostly a moderate increase (2.1 to 2.67%). But there was a municipality with an increase of 7.9% (São Vicente) and one municipality where the price even decreased by 3.99% (Santana). But over the year, prices rose in all these municipalities. This group includes both the leader in terms of growth rate, Santana, where since April 2022 the average price per square meter has increased by as much as 33.4%, and the outsider, Câmara de Lobos, where the average price per square meter in the same period rose "only" by 15.7%.

If we talk about the island as a whole, as of April 2023, the northern municipalities of Madeira were cheaper than the southern ones. However, prices in all of them are growing quite steadily.


How much reliance can we place on Idealista.pt data?

When someone from abroad wants to buy a house in Portugal, they are often sent to Idealista.pt, as it is the largest site with real estate listings in the country. However, the statistics this website gives us are only based on listings from sellers or landlords. Naturally, it cannot claim to be a 100% accurate reflection of the real situation on the market, as it does not include any information about sales. To check whether the numbers from Idealista.pt can be trusted, let us check them against the information on transactions available on the National Institute of Statistics of Portugal website.

The most recent data available today regarding Madeira is for the fourth quarter (October - December) of 2022. Therefore, unfortunately, we can't know right now what the real prices per square meter of real estate in Madeira are this spring. What we can do is compare the available fourth quarter data from both sources. This will give us an idea of how close to reality the figures we now see on Idealista.pt.

The table shows the average prices per square meter from both sources, as well as the difference between them in percentage terms. For some reason, the report of the National Institute of Statistics for the 4th quarter of 2022 listed only Funchal and there were no other Madeiran municipalities.

As we can see from this comparison, when making sales transactions in the fourth quarter of 2022, the average price per square meter came out lower than what sellers were asking for on Idealista.pt. The difference is quite small, 7.8%.

So in the end, can the price statistics on Idealista.pt be trusted? I would say that in the case of Madeira this statistic is a very rough estimate of things, simply because we do not have more accurate tools that describe the current situation and are available right now. Nevertheless, it cannot be relied upon confidently, especially when it comes to municipalities outside of Funchal. Whoever is seriously considering purchasing a home in Madeira is best advised to seek the advice of a professional real estate agent who knows the specifics of the archipelago of Madeira.


And what can be said about Madeira real estate as an investment?

Long-term rental property in Madeira

To assess the situation in the medium- and long-term rental market, we again turn to the website Idealista.pt.

And again, for some reason, the data is only for Funchal. The average cost per square meter of rented housing in April 2023 is 12.5 euros. Since February this year, this figure has increased by 5.93%, and since last April - as much as 27%. It is noteworthy that the growth rate of the cost per square meter rented in Funchal almost coincides with the growth rate of the square meter sold in the same municipality (27.6%, as we saw above).


Tourist rentals in Madeira

Madeira is a 2-hour flight from mainland Portugal. One often hears from those who have settled there as adults that it is not very comfortable to live on the island all the time, as life becomes too monotonous at a certain point. In this regard, Madeira may have more advantages as a vacation destination rather than as a place to live permanently.

For those who are interested in Madeira real estate for investment, it might make sense to consider tourist rentals. To assess its potential on the island, we refer to the service All The Rooms. The service is paid, and in free access is only the most basic statistics, such as the number of sites offered for tourist rent in Madeira through the service AirBnB, as well as the average cost per day of rent in the various municipalities of Madeira. We have already used these statistics in winter review so now we can assess how much the situation has changed in 3 months.

The table above shows 2 periods: November 2022 - February 2023 and February - May 2023. For each period the number of tourist rentals available in each of Madeira's municipalities (columns 1 and 3) and the average cost per night in those properties (columns 2 and 4) are shown.


If we talk about the number of properties, the tendency of a slight increase since winter is obvious. In almost all municipalities, tourists were offered slightly more apartments and houses in the spring than in winter. The same can be said about the cost of these accommodations: in the vast majority of municipalities, the price per night in the spring was slightly higher than it was in winter. Note that unlike the data from Idealista.pt and the National Institute of Statistics, which we analyzed earlier, All The Rooms is not tied to the average cost per square meter. That's why the table above shows the average for all properties rented during that period, regardless of size (they can be both large villas and small rooms). Nevertheless, even this data helps to start navigating the situation.

Most vacation rentals are open in the municipality of Funchal (2,637), but this municipality is behind Calheta, Ribeira Brava and Ponta do Sol, where the average price per night is much lower. The difference can be explained both by the higher competition in the municipality of Funchal, and by the fact that in these municipalities tourists can be offered very different accommodation. For example, in Funchal, it may be apartments and studios, while in other municipalities it may be villas. Since a villa is more expensive than a studio, statistically the other municipalities will be more expensive than Funchal.

In any case, this comparison can be a starting point in the study of the potential of Madeira real estate as an investment.

The most expensive and cheapest real estate available in February 2023

Idealista.pt currently offers 2,145 homes for sale. In this review I will include only completed properties.

The most expensive houses in Madeira today

4.990.000 euros Three-storey house with 4 bedrooms and 7 bathrooms. Own gym and outdoor sports ground, small swimming pool, garage. Plot of 2,3 hectares. Energy efficiency class A. View of the bay. Municipality of Funchal.


4.500.000 euros Restored 17th century manor house on a plot of 1 hectare. 6 bedrooms, 8 bathrooms. Garage, swimming pool. Energy class E. Municipality of Funchal.


4.190.000 euros Two-storey house of 580 square meters. 3 bedrooms, 5 bathrooms. Panoramic view of 270 degrees. Swimming pool, vertical garden, jacuzzi, home theater and many different spaces to spend time together. Garage for several cars. The listing does not say anything about the year the house was built, nor does it specify if construction has already been completed. The house is sold as finished, but there are no actual photos, instead there are plans and renderings. Energy efficiency class A. The municipality of Calheta.


3.500.000 euros Estate on a plot of over 5000 square meters. House built in the 30's of the 19th century, renovated later. Area of the house is 803 square meters. 6 bedrooms, 2 bathrooms. Energy efficiency class E. Municipality of Funchal.


Minimum prices for finished houses, where you can move in without major repairs immediately:

90.000 euros A small house of 59 square meters, built in 2000. 1 bedroom, 1 bathroom. Plot of 37 square meters. There is a garage. Currently used for tourist rentals. Municipality of Santa Cruz.


115.000 euros Small house of 39 square meters on a plot of 180 meters. 1 bedroom, 1 bathroom, terrace. Facade in need of renovation. Municipality of Funchal.


120.000 euros House of 72 square meters, without plot. 1 bedroom, 1 bathroom. Energy efficiency class E. Municipality of Funchal.


Now let's study the market for the sale of apartments, which are presented on portal 4.302. Many offers, especially expensive ones, either are obviously still under construction, or the announcement does not say anything about it, but there are no real photos. In this review, I have included only objects where you can say with certainty that the object is commissioned, or where there are real photos. For example, let's take the T2 typology, that is, apartments that have a living room and 2 bedrooms.

The most expensive apartments:

1.300.000 euros Apartment of 214 square meters in a residential complex built in 2020. 2 bedrooms, 3 bathrooms. 5th floor of the house with an elevator. Sold with furniture and appliances. Energy efficiency class A. Swimming pool and gym. Funchal municipality.


1.080.000 euros Apartment of 252 square meters in a house built in 2021. 2 bedrooms, 2 bathrooms. 7th floor in a house with an elevator. The garage is included in the price. Energy efficiency class C. Funchal municipality.


The cheapest apartments:

129.000 euros Apartment of 90 square meters. 1 bathroom, balcony. The house was built in 2009. Energy efficiency class C. Municipality of Santana.


136.000 euros Apartment of 69 meters. 1 bathroom. Located on the 1st floor. Energy efficiency class E. Funchal municipality.


140.000 euros Apartment of 100 meters. 1 bathroom. Located on the 3rd floor in a house without an elevator. The house was built in 2006. Energy efficiency class C. Municipality of Santa Cruz.


As a result, what can be said about the Madeira real estate market this spring?

As we could see from various sources, real estate prices in sellers' listings increased during the year in all municipalities in this region. There is also reason to believe that the actual selling prices may not be much lower than what a buyer would expect if they were guided by the Idealista portal. At least this will be the case in the regional capital, Funchal. In the same city the majority of properties are offered for sale and for rent.

If you compare the supply of homes and apartments with what we saw in the winter of 2023, it is striking that the list of the most expensive properties has not been updated much. But the listings for the cheapest apartments and homes for sale in good condition in spring 2023 are completely different from what we saw in winter. It makes sense that the cheapest options are in higher demand.

If you are looking for a home in Madeira for your own residence or as an investment, through our website you can contact professional real estate agents who will be happy to help you find and buy the best option.

I hope Madeira exceeds your expectations!

Translated from Ukrainian by Rodion Shkurko

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