From this material, you will learn the situation with the Porto real estate market in May – July 2023. In particular, the purchase prices of residential houses and apartments, the cost of long-term rentals, and the rates for short-term tourist rentals will be highlighted.
For those who are not yet familiar with the administrative division of Portugal, it is important to pay attention to the fact that the word Porto can refer to a large area. Firstly, there is the region of Porto (Distrito do Porto), which includes 18 municipalities, and the city of Porto (Município do Porto), which is among these municipalities. The city of Porto is divided into 7 districts. In the following, we will examine the dynamics of 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
Let's start the analysis with the Idealista.pt platform, which is one of the key resources for real estate search in Portugal. Idealista provides static information on the average cost per square meter of housing from the listings on this website.
A first look at the charts shows that the price changes in real estate sales over the last year are not significant, while rent growth is more pronounced. In the next section, we will analyze the information presented for both sales and rentals in more detail.
Sale of real estate in the municipalities of 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 July 2023.
The price per meter is the highest in the municipality of Porto, 3.441 euros per square meter. The increase since May was insignificant, only 1.5%, but in one year (since July 2022) the price has increased by 11.8%. Just behind Porto is Matosinhos, its northern neighbor. It is home to a cruise port, docks, fish restaurants and shopping centers. In July, the average price per square meter was 3,005 euros, the result of a 1.28% drop in prices since May. Compared to July 2022, the price per square meter has increased by 17.6%.
The next group of municipalities (Vila Nova de Gaia and Paredes) is much cheaper. The average cost per square meter there is in the range of 2,000-2,200 euros. While Vila Nova de Gaia has shown quite moderate growth rates, both quartile and annual, the municipality of Paredes has shown something surprising. Since May 2023, the price per square meter has increased by 72.92%, resulting in an annual growth rate of 89.4%. What has been so unusual in Paredes, and will this increase become a trend?
In the other municipalities of the Porto agglomeration, price changes over the last three months were noticeably more moderate. In some places they decreased slightly, in others they increased slightly. In terms of annual changes, prices have mostly increased. Felgueiras (26.6%) and Penafiel (23.4%) showed the largest annual increases. At the same time, in 2 municipalities, Valongo and Trofa, prices decreased by 7-8%.
How much can we trust the statistics from Idealista.pt?
The statistics we see on Idealista.pt are taken from real estate deals listings posted only on this web resource. This gives us an idea of the "seller's price". However, for a more accurate understanding of the situation, it would be useful to have access to the actual transaction budgets concluded in the market. The only source of such information is the quarterly report of the Portuguese National Institute of Statistics. The most recent information available today refers to the first quarter of this year (January – March). As for the state of the real estate market in the summer of 2023, this report will not provide us with this information. However, we can compare the first quarter data from both sources. This allows us to assess how closely the figures we see on Idealista.pt correspond to the real situation. As an example, let's look at a few municipalities from the Porto District.
The table shows the real average price per square meter in sales deals according to the National Institute of Statistics (column 1), the average price per square meter from ads from Idealista.pt (column 2), and the difference between them in percentage (column 3).
This comparison shows that in all municipalities, in the first quarter of 2023, the actual average price per square meter at purchase was lower than the price indicated by sellers on Idealista.pt. The most notable differences were in Matosinhos (47.92%) and Porto (24.55%), which are the most expensive municipalities according to Idealista.pt. In four municipalities: Maia, Vila do Conde, Gondomar and Santo Tirso, the difference was minimal, 0.77 – 4.06%.
There are several explanations for such significant differences between prices in advertisements and actual transactions. The difference in the way average values are calculated between the institute of statistics and Idealista.pt is one reason. Furthermore, it is possible that the owners initially indicated inflated prices, counting on bargaining by the buyer.
Despite the differences, many people trust the data calculated by Idealista.pt, simply because it is the most up-to-date information available. However, it is worth remembering that this data may not reflect the value of real deals, especially in the most popular municipalities.
Long-term rental properties in the municipalities of Porto Region
The table above shows the average price per square meter of properties whose rental ads are 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 July 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 July, the average rental value per square meter was 15.70 euros, which is the result of a 3.97% increase in May. Over the year, the rental value increased significantly – by 35.7%.
In most of the other municipalities considered, the rent per meter has increased slightly since May, and the annual increase is even more pronounced, ranging from 16.1% to 29.3%. For some reason, no data on annual rent growth is presented for Matosinhos.
Daily rental properties in the municipalities of Porto Region
As a region with an extensive list of attractions, Porto is popular among tourists. Is the tourist popularity reflected in the cost of housing, and what is the investment potential of real estate in this region? These questions can be answered by All The Rooms, a service that provides a preliminary estimate of the potential income from Airbnb's daily rentals. This estimate uses data on the average daily rental price of similar properties in the same area of the city, as well as occupancy rates. This service is really useful, but limited information is available in its free version.
For example, you can find out how many tourist rental properties are offered in the selected area during a certain period of time. There is also data on the average cost of rent per day in different municipalities of Porto Region for the last 3 months. The service gives prices in dollars, and in the table below they are converted to euros at the current exchange rate. Municipalities in this table are sorted by the cost of 1 night.
The table shows the number of properties published on the AirBnB vacation rental service between May 13 and August 13, 2023, as well as the average price of 1 night's rent for that accommodation. For some municipalities, there is no data on the number of rented properties. In these cells, we see N/A instead of numbers.
It is important to note that the data presented has no direct correlation with the cost per square meter of accommodation, an indicator we considered earlier. The table shows the average cost of renting one night in all tourist rental properties. These objects include different types of accommodation – from villas to studios.
The city of Porto has the highest number of rental properties, but is behind 9 other municipalities in terms of tourist rental value. This data helps to begin to understand the distribution of rental values among the different municipalities and to 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 July 2023.
The most expensive neighborhood in the city of Porto in summer 2023 is "Aldoar - Foz do Douro - Nevogilde". This area combines several neighborhoods located on the right bank of the Douro River, with access to the ocean. The attractiveness of this neighborhood is due to the presence of beaches, a city park, an international school, hospitals and several institutions of higher education. The average price per square meter for sales in July 2023 was 4,288 euros, 5.2% higher than in May. Compared to July 2022, there is an increase of 7.6%.
The next most expensive group of districts is far behind the first: prices per square meter range from 3,100 to 3,900 euros per square meter. The most expensive of them – "Cedofeita - Santo Ildefonso - Sé - Miragaia - São Nicolau - Vitória" - 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 price per square meter of real estate in the area in July was 3.865 euros. This is a tiny increase – at the level of statistical error – compared to May (0.05%). Over the year, the area showed a growth of 7%.
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 in the last 3 months. Paranhos district stands out from the rest because over the year, the cost per square meter in it increased by 18.2%. This is the highest growth rate in the whole city of Porto.
In the cheapest areas of Porto today, the average cost per square meter is between 2.700 and 2.900 euros. These are the neighborhoods of Ramalde and Campanhã. They have seen a slight increase in prices since May, and since July last year – a moderate increase. Campanhã is the second district in terms of annual growth rate in the city of Porto with 12.5%.
Let's now take a look at the rents in these areas of the city.
Long-term rentals in Porto neighborhoods
The area with the highest average rental rate is the historic center of Porto, "Cedofeita - Santo Ildefonso - Sé - Miragaia - São Nicolau - Vitória". The rent per square meter in it will cost 19.9 euros per month. In the last 3 months the rent has increased by 8.15%, but the annual growth rate is a shocking 51.4%!
Very similar annual growth (51.2%) and even higher quarterly growth (9.93%) was shown by the second most expensive district, Bonfim, where the cost per meter in July was 16.6 euros per square meter.
As you can see from the table, the annual rental price growth is noticeable and stable in every neighborhood (from 17.9% to 51.4%). Therefore, if you are facing a choice between buying and renting an apartment in the city of Porto or are considering the option of buying a property for a subsequent long-term lease, it makes sense to compare the rental price growth rates with the purchase price growth rates to make an informed decision.
Daily rentals in Porto
Another option for investing in Porto real estate can still be buying for short-term tourist rentals. To assess its potential, we turn again to the All The Rooms service. 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's rent for this accommodation.
This service provides information without reference to the cost per square meter of housing, so the table shows average values for all objects commissioned during this period (it can be both penthouses and rooms).
According to this data, the most expensive places for a tourist coming to Porto in summer are São Nicolau (135.24 euros), "Aldoar - Foz do Douro - Nevogilde" (126.96 euros) and Miragaia (122.36 euros). And the area with the most daily rental offers is Santo Ildefonso (3.226 tourist accommodation). Interestingly, I could not find information about some neighborhoods 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 neighborhoods in the table have the designation N/A.
The most expensive and cheapest properties available to buy in August 2023
Today on Idealista.pt there are 9,467 ads for houses for sale in the Porto Region. Among them, the most affordable options may be ruins, which someone can buy mainly for the land under them. It is interesting to note that even among the most expensive offers, there are palaces and estates that require serious repair work. However, this review will consider only those houses that are ready for living and do not require reconstruction or major repairs.
Among the finished residences, the most expensive in 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. The property has several buildings, some of which will require renovation.
Event estate on over 1 acre of land. There is a separate house to live in or rent out, a pavilion for receptions, outdoor space, heated pool, etc. This property featured in our spring review and was priced higher then. Municipality of Maia.
Estate with vineyards and garden of over 14 hectares. Several buildings on the property. The main house in rustic style. 3 bedrooms, 3 bathrooms. Energy efficiency class F. Municipality of Lousada.
Minimal prices on finished residences that you can live in without having to start major renovations right away:
House of 180 square meters with 2 bedrooms and 2 bathrooms. Plot of 284 square meters. Energy efficiency class E. Municipality of Felgueiras.
House of 88 square meters with 4 bedrooms and 2 bathrooms. The property has its spring. Energy efficiency class E.
When it comes to apartments, there are 19.012 available in the Porto Region. We will set our 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:
Apartment of 189 square meters on the second floor. 2 bedrooms, 4 bathrooms. There are several other rooms that can be turned into bedrooms if needed. The house is in a luxury condominium with river and ocean views. The home has an elevator and a pool. Energy efficiency class B. City of Porto, neighborhood Lordelo do Ouro e Massarelos.
Apartment of 267 square meters. 2 bedrooms, 3 bathrooms. The property has been recently renovated. The facade of the building has been preserved and the inside has been modernized in a minimalist style. The building has an elevator to the inner courtyard with a garden. Energy efficiency class A. Porto, neighborhood Cedofeita - Santo Ildefonso - Sé - Miragaia - São Nicolau - Vitória.
The apartment is 171 square meters. 2 bedrooms, 3 bathrooms. Balcony overlooking the park. The building has an elevator and a garage. The house was built in 2006. Energy efficiency class B. Porto, Aldoar - Foz do Douro - Nevogilde neighborhood.
Apartment of 166 square meters. 2 bedrooms, 4 bathrooms, storage room. 7th floor. The building has an elevator and a garage. Views of the Douro River and the ocean. Energy efficiency class D. Porto, neighborhood Aldoar - Foz do Douro - Nevogilde.
Penthouse of 156 square meters. 2 bedrooms, 3 bathrooms. Terrace overlooking the Douro River and a private small pool. The building has an elevator, underground parking with bicycle compartment, gym and children's playground. Energy efficiency class A. Porto, Lordelo do Ouro e Massarelos neighborhood.
Duplex of 215 square meters in a gated complex. 2 bedrooms, 2 bathrooms. Terrace overlooking the Douro River and a private small pool. The building has an elevator and parking, where the owner of the apartment owns a closed box for 2 cars, as well as a gym and swimming pool. Energy efficiency class A. Municipality of Vila Nova de Gaia.
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 where there are already 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:
Apartment of 134 square meters. 2 bedrooms, one bathroom, terrace. There is a garage and a storage room. Energy efficiency class C. Municipality of Lousada.
Apartment of 100 square meters. 2 bedrooms, one bathroom, balcony. There is a garage. Energy efficiency class D. Municipality of Vila Nova de Gaia.
The apartment has an area of 83 square meters. The house was built in 1995. Energy efficiency class D. Municipality of Baião.
If we mention apartments in the city of Porto, more or less decent options start from:
Apartment of 96 square meters. 2 bedrooms, 1 bathroom. The house was built in 1982. Energy efficiency class B. Nearby university. Paranhos neighborhood.
Apartment of 62 square meters. 2 bedrooms, 1 bathroom. The house was built in 1988. 4th floor in a house without an elevator. Energy efficiency class D. Ramalde neighborhood.
Apartment of 70 square meters in the most historic center, Cedofeita - Santo Ildefonso - Sé - Miragaia - São Nicolau - Vitória area. 2 bedrooms, 1 bathroom. 3rd floor in a house without an elevator. Energy efficiency class not specified.
What conclusions can be drawn about the state of Porto's real estate market this summer
The Porto region covers a large area, which not only has many tourist attractions, but also offers a comfortable place to live and do business. Naturally, the owners of real estate in this region, and especially in the city of Porto, want to maximize their profits by increasing the sale and rental prices. However, if the National Institute of Statistics is to be believed, at least sales are likely to be made at lower prices than those quoted by sellers on the Idealista website.
If we compare the specific sales offers on Idealista.pt with what we have seen this spring, except for a segment of very expensive houses and a couple of cheap apartments, almost all properties available in May are no longer showing up in searches. Predictably, cheap properties are much more in demand than expensive ones.
I wish you a successful purchase!
Translated from Ukrainian by Rodion Shkurko