This article will inform you about the Porto real estate market in the period between August and October 2023. It will show you the price trends for the purchase of houses and apartments, long-term rentals and short-term tourist rentals. It will also give an overview of the most expensive and cheapest properties for sale.
Let's start with a moment of geography. The term "Porto" can refer to a large area. Firstly, it is the region of Porto (Distrito do Porto), consisting of 18 municipalities, which includes the city of Porto (Município do Porto). The city of Porto is divided into 7 districts. We will look at the changes in real estate prices in each of the municipalities of the agglomeration and in each district of the city.
Dynamics of real estate prices in the district of Porto
The Idealista.pt platform is the most famous website used to search for real estate in Portugal, at least by foreigners. Idealista provides statistics on the average price per square meter of housing based on the listings posted on this website.
As the charts show, changes in prices for real estate sales over the last year are not very noticeable, while rent growth is more pronounced. In the next part of the analysis, we will examine the presented information in more detail, covering both the sales and rental segments.
Sale of real estate in the municipalities of the Porto region
The table above shows the average price per square meter of the properties advertised for sale on Idealista.pt (columns 1-3). Column 4 shows the percentage change in prices per quarter (up or down). Column 5 shows the change by calendar year. The municipalities in the table are ordered in descending order of average price per square meter in October 2023.
The price per meter is the highest in the municipality of Porto, 3.392 euros per square meter. Compared to August, it even decreased slightly, but over the year (from October 2022) it increased by 6.5%.
Porto is followed by its nearest northern suburb, Matosinhos, where the cruise port, docks, fish restaurants and shopping centers are located. In October, the average price per square meter was 2.794 euros, which is the result of a 3.85% drop in prices since August. If we discuss the changes since last October, they are practically not noticeable, the average price per square meter increased by only 0.6%.
There are 2 other municipalities with an average price per square meter above 2,000 euros: Vila Nova de Gaia and Póvoa de Varzim. Their average price per square meter is in the range of 2,000-2,600 euros. Both of them showed rather modest quarterly growth (0.31–1.8%) and moderate annual growth (5–8.5%).
In the other municipalities of the Porto agglomeration, price changes were somewhat more marked. The following stand out strongly against the general background: Trofa (where the price decreased by 10.2% over the year), Paços de Ferreira (the largest quarterly increase of all municipalities, 6.1% with a fairly high annual growth rate, 14.1%). Furthermore, noteworthy are the municipalities with the highest annual growth rates: Penafiel and Felgueiras (16.2% and 14.6%, respectively).
Can we really trust the statistics from Idealista.pt?
The data we get from Idealista.pt is based on real estate transaction listings posted only on this web resource. Thus, we get an idea of the "seller's price". However, for a more accurate understanding of the market situation, it would be useful to have access to real data on the budgets of transactions concluded on the market. The only source of such information is the quarterly report of the Portuguese National Institute of Statistics. The last available information refers to the second quarter of the current year (April–June). If we compare the data for this period from the National Institute of Statistics and from the Idealista portal, we can assess the reliability of the latter. As an example, let us look at a few municipalities from the Porto District.
The table above shows: real average prices per square meter in sales transactions according to data from the National Institute of Statistics (column 1), prices from ads on Idealista.pt (column 2), and the percentage difference between them (column 3).
We can see that the difference between the prices from advertisements and the value of real transactions is maximum in the most expensive municipalities according to Idealista: Porto, Matosinhos, Vila Nova de Gaia, Póvoa de Varzim. In these municipalities, a square meter of housing on Idealista.pt was 12-20% more expensive than the actual purchase and sale.
At the same time, in the cheaper municipalities this difference was minimal, up to 5.09%. And in the municipality of Santo Tirso it even turned out that the actual average price per square meter at the conclusion of transactions was higher than in the advertisements of sellers published on the Idealista website.
There are several possible explanations for the difference in prices from the above sources. One of them is that the National Institute of Statistics and Idealista.pt have different methods of calculating average values. Likewise, sellers may have started with inflated prices in their advertisements, expecting to bargain with buyers.
Despite the differences, many people trust the data from Idealista.pt, just because it is the most up-to-date information. But it is important to remember that this data may not fully reflect the actual transaction prices, especially in the most popular municipalities. As we can see from the price comparison in Q2 2023, the prices per square meter of housing in the cheaper municipalities of the Porto agglomeration of Idealista are quite reliable.
Long-term rental properties in the municipalities of the Porto region
The table above shows the average price per square meter of properties whose rental ads were published on Idealista.pt (columns 1-3). Column 4 shows how the price has changed over these three months: by how many percent it has increased or decreased. 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 October 2023.
In the last 3 months, housing for rent was not offered in all municipalities of the region, so the list of cities in this table was shorter. Similar to the data on sales, the leading position in terms of rental cost per square meter is occupied by the city of Porto. In October, the average rental price per square meter was 16.50 euros, an increase of 2.48% from August. Over the year, the cost per square meter for rent has increased by 32.4%.
In most of the other municipalities under consideration, the price of a rented square meter changed quite differently during the last quarter: from an increase of 10.48% in Matosinhos to a decrease of 1.16% in Gondomar. At the same time, the trend over the last year is quite unambiguous — the growth of rental rates. The more popular and more expensive the municipality, the more noticeable was this increase (from 12.1% to 28.3%).
For some reason, there is no quarterly rental value growth data for Póvoa de Varzim.
Daily rental properties in the municipalities of the Porto region
The tourist popularity of a location often affects the price of real estate in it. This is especially true for the northern region of Portugal, where there are so many attractions, and they are not concentrated only in the city of Porto. Let's see what prospects there are for short-term tourist rentals in different municipalities of the Porto agglomeration. To accomplish this, let's use All The Rooms, a service that analyzes the potential income from Airbnb rentals. It uses data on the cost per day of renting similar accommodation and its occupancy rate.
The free version of the service provides limited information: the number of available rental properties and the average price per night in the different municipalities of the Porto region for the last 3 full months (from August 1 to November 1, 2023), expressed in dollars (and in the table converted to euros at the current exchange rate). The municipalities in this table are ordered by the average rate per 1 night of stay in a tourist rental property.
For some municipalities, there is no data on the number of properties delivered. These cells have N/A instead of numbers.
All The Rooms data are not linked to the price per square meter of housing, which we examined earlier, studying the statistics of Idelalista.pt and the National Institute of Statistics. On the contrary, they show the average rental values of different types of housing — from villas to studios — regardless of their size.
Although the city of Porto has the highest number of rental properties, it was second to 11 other municipalities in terms of tourist rental value. This information allows you to understand how rental costs are distributed across different municipalities and can help you assess the potential for real estate investment.
Properties for sale in different areas of Porto
The table above shows the average price per square meter of properties advertised for sale on Idealista.pt (columns 1-3). Column 4 shows how the price has changed over these three months: by how many percent it has increased or decreased. Column 5 shows the change over the calendar year. The districts in the table are arranged in descending order of average price per square meter in October 2023.
The most expensive district of the city of Porto in the fall of 2023 is "Aldoar - Foz do Douro - Nevogilde". This area includes several neighborhoods located on the right bank of the Douro River with access to the ocean. It has everything you need for a comfortable life: beaches, city park, international school, hospitals and several institutions of higher education. In October, the average price per square meter on sale was 4,240 euros, which is only slightly higher than in August (up 0.83%). The annual growth (since October 2022) is also not significant, only 1.4%.
The next most expensive group of districts, where prices per square meter range from 3,100 to 4,000 euros per square meter. The most expensive one is "Cedofeita - Santo Ildefonso - Sé - Miragaia - São Nicolau - Vitória", which is the very center of the city of Porto, rich in tourist attractions such as the Porto Cathedral, São Bento train station, Lello bookstore, House of Music, Torre dos Clérigos tower and many others. The average cost per square meter of real estate in the area in July was 3,991 euros. This value is the result of quarterly growth of 3.18% and annual growth of 4.2%.
Other neighborhoods in this group adjoin the historic center from the west, east, and northeast: Lordelo do Ouro e Massarelos, Bonfim and Paranhos. In all of them, prices have not changed much since August, some upward and some downward. When it comes to year-on-year changes, two of them stand out from the rest. First, it is Lordelo do Ouro e Massarelos — the only area where the cost per square meter decreased over the year, although not by much (1.6%). Secondly, it is Paranhos, which showed the highest growth rate in the whole city of Porto (11.3%).
In the cheapest areas of Porto today, the average cost per square meter is between 2,800 and 3,000 euros. These are the neighborhoods of Ramalde and Campanhã. They have seen modest price growth since August, and since October last year, prices in both have risen by 8.3%.
Let's move on to analyzing the dynamics of rental prices in these areas of the city.
Long-term rentals in Porto neighborhoods
The most expensive area in terms of rent is the historical center of Porto, the area "Cedofeita - Santo Ildefonso - Sé - Miragaia - São Nicolau - Vitória", where the rent per square meter is 20.5 euros per month. Since August, rents have increased by 3.02% and the annual increase is an impressive 29.2%!
The second most expensive area was "Aldoar - Foz do Douro - Nevogilde", which is far behind the first with 16.7 euros per meter. In this neighborhood, both quarterly and annual growth were quite restrained (3.09 and 9.3%, respectively).
The table shows that the annual dynamics of rental prices is positive, although the rate of growth depends on the neighborhood. Therefore, if you are facing a choice between buying and renting an apartment in Porto, or if you are considering the option of buying for a long-term lease, it is wise to compare the rental price growth rate with the growth rate of the purchase price to make the best decision.
Daily rentals in Porto
Let's use the All The Rooms portal again to find out the potential income from Porto real estate for tourist rentals. The table below shows the number of properties published on AirBnB between August 1 and November 1, 2023, as well as the average price of 1 night's rent for this accommodation.
Tourists who stayed in the districts of São Nicolau (136.16 euros), "Aldoar - Foz do Douro - Nevogilde" (132.48 euros) and Miragaia (129.72 euros) paid the most for their stay in Porto this fall. And the area with the most daily rental offers is Santo Ildefonso (3.438 tourist accommodation facilities). It is noteworthy that I could not find information about some central districts of Porto on All The Rooms. Either the service does not show this information in its free version, or it does not know these names. These districts in the table have the designation N/A.
The most expensive and cheapest properties available for purchase in November 2023
Idealista.pt now has 9.443 ads for houses for sale in the Porto region. Among them, the cheapest options are ruins, which someone can buy mainly for the land under them. It is noteworthy that even among the most expensive offers there are villas and estates that require major repairs. In this review, I have included only those houses that are ready for living and do not require reconstruction.
Of the completed homes, the most expensive in the Porto region today are
Property in the municipality of Vila Nova de Gaia. Land of 5.6 hectares with an orchard. House of 276 square meters with 7 bedrooms. There are several buildings on the plot, some of which will require renovation. This option also appeared in last quarter's price survey.
House in the historic center with more than 1,000 square meters. 6 bedrooms, 8 bathrooms. Central heating. There is a garden with a swimming pool. Energy efficiency class E. Municipality of Porto.
Minimal prices on finished homes that you can live in without having to start major renovations right away:
A microscopic house of 30 square meters with 1 bedroom and 1 bathroom near Campanhã train station in Porto. There is a plot of 61 square meters, unfortunately surrounded by other people's sheds and ruins. There is no energy efficiency certificate.
A cute 192 square foot home with 2 bedrooms and 1 bath. Some renovations will most likely be needed. Energy efficiency class D. The house is sold with 2 plots that are located 500 meters away. Municipality of Marco de Canaveses.
When it comes to apartments, there are 20,264 of them available in the Porto region. We will set the search criteria and only look at apartments with 2 bedrooms, ready to move in and not encumbered by rental contracts.
The most expensive apartments in the Porto region:
A duplex of 265 square meters on the fifth floor. House with an elevator. 2 bedrooms, 4 bathrooms (3 of them very exotic design). Garage for 4 cars. House in a luxury condominium overlooking the river. The house has an indoor pool, sauna, tennis court, gym, kindergarten. Energy efficiency class B. City of Porto, neighborhood Lordelo do Ouro e Massarelos.
A duplex in the historic building Aliados 9. Total area of 204 square meters. 2 bedrooms, 3 bathrooms. 6th floor in a house with an elevator. Energy efficiency class C. Porto, neighborhood Cedofeita - Santo Ildefonso - Sé - Miragaia - São Nicolau - Vitória.
When searching for the most affordable apartment options on the portal Idealista.pt, you will often find advertisements with apartments that are closed for viewing, as well as apartments that already have tenants or apartments that are only partially sold. There are also variants without the appropriate license for residential premises. I have excluded such options from this review.
The cheapest apartments in an acceptable condition for occupancy:
The apartment is 114 square meters. 2 bedrooms, one bathroom, 2 balconies. There is a garage. Second floor in a house with an elevator. The house was built in 2002. Energy efficiency class D. Municipality of Penafiel.
Apartment of 98 square meters. 2 bedrooms, one bathroom, balcony. 3rd floor in a building without an elevator. Energy efficiency class D. Municipality of Amarante.
Apartment of 108 square meters. 2 bedrooms, 2 bathrooms, there is a terrace. The house was built in 1997. Energy efficiency class E. Municipality of Lousada.
If we mention apartments in the city of Porto, more or less decent options start from:
Two-storey apartment of 148 square meters. 2 bedrooms with a balcony, a living room with balcony, 1 bathroom. There was a store on the first floor. The house was built in 1984. Energy efficiency class C. Campanhã neighborhood.
What conclusions can be drawn about the state of Porto's real estate market this fall
It seems that over the past 3 months, Porto and its surrounding municipalities have become increasingly popular. A slight increase in real estate sales prices was accompanied by a noticeable increase in prices for long-term rentals. According to the National Institute of Statistics, at least in the most expensive municipalities, sales are still taking place at lower prices than those quoted by sellers on Idealista.
If we compare the specific sales offers on Idealista.pt with what we saw this summer, it is striking to see almost 100% updated offers (except for very expensive residences in non-ideal condition), as well as a strong increase in the price of the cheapest options and some cheapening of the most expensive ones.