From this article you will learn how things are going in the Lisbon real estate market this spring, what changes have taken place in the last 3 months with prices in Lisbon county and in the city of Lisbon. We will look at the situations of buying and selling houses and apartments, their long-term rentals, as well as short-term tourist rentals.
To begin with a geographical background: the district of Lisbon (Distrito de Lisboa) consists of 16 municipalities, one of which is the city of Lisbon (Concelho de Lisboa), which, in turn, is divided into 24 districts. The district is quite large and, of course, some municipalities are quite far from the capital, Lisbon. Below we will see how this is reflected in their real estate prices.
The dynamics of real estate prices in the Lisbon District
We will start our analysis with the statistics provided by Idealista.pt, one of the main websites to find property in Portugal. The main indicator of Idealista is the average cost per square meter of real estate offered on the site.
At first glance on the graphs, the change over the year in terms of sales is not strong, but rents have steadily increased throughout the year. Next, we will look in detail at the data relating to both sales and rents.
Property for sale in the municipalities of the Lisbon district
The table above shows the average price per square meter of real estate whose listings are 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.
As we can see, the municipality of Lisbon leads in value with 5.285 euros per square meter. Compared to February the increase was 2.07%, and over the year the price has increased by only 4.7%. Behind Lisbon follows Cascais, a resort on the ocean coast, where the residence of the President of Portugal, private international schools, casinos, and other trappings of the good life. The average price per square meter in April 2023 was 4.605 euros, which is 1.95% higher than in February 2023 and as much as 15.5% higher than in April 2022.
Prices per square meter in the other suburbs of Lisbon over the past three months have not changed much. They increased mostly by 1 - 4%. In three municipalities they even fell in the range of 2.4% (Lourinhã, Arruda dos Vinhos, Sobral de Monte Argaço). But in three others (Alenquer, Azambuja, and Cadaval) they increased much more significantly, by 7 - 11%.
In terms of year-on-year changes, all municipalities saw an increase in prices. The leaders in terms of rate of growth were Cadaval (35.2%), Alenquer (29.4%), and Sobral de Monte Argaço, which even a quarterly price reduction has not prevented an impressive 26% annual growth. It is noteworthy that these three municipalities are at the end of our list, that is, the cost per square meter is relatively low. How long it will stay that way is a big question.
How much can we rely on data from Idealista.pt?
Idealista.pt offers statistics for analysis that is based on housing offers on this very site. It is clear that if someone offers a property for a certain price, it does not mean that it will be bought at the same price. In addition, it is possible that someone is selling a house or apartment without posting on this site. So, to assess the accuracy of this data, let's turn to the report of the National Institute of Statistics of Portugal.
The National Institute for Statistics publishes very detailed reports on a quarterly basis. The most recent information currently available is for the fourth quarter (October - December) of 2022. This report will not tell us about the Lisbon real estate market in the spring of 2023, but we can compare the 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 are. Let's take a few municipalities in Lisbon County as an example.
The table shows the real average cost per square meter in sales transactions according to the National Institute of Statistics (column 1), the average cost per square meter from Idealista.pt listings (column 2), and the difference between the two in percentage terms (column 3).
As can be seen from the table, when making sales transactions in the fourth quarter of 2022, the average cost per square meter came out lower than what sellers were asking for on Idealista.pt. In the case of the municipality of Lisbon, this difference was 27.43%, and in the case of Cascais 19.05%. In the case of Sintra, another popular tourist destination, the difference was 17.15%. At the same time, in some municipalities, this difference was not so high, only 5 - 8%.
There are several reasons for this discrepancy. The most important one is probably that the methods of calculating averages are different for the Institute of Statistics and for Idealista.pt, so we would never have seen a complete match of the numbers.
It could also be that the subject of the deal was published on Idealista in a previous period and was removed from publication at some point. Preparations for the deal may have been delayed, so we can't know for sure if its value was included in Idealista's statistics this quarter.
We do not exclude the possibility that the deal reached only those properties where the owners were willing to offer a discount. And, of course, the owners may have asked for an inflated price when they posted on the site, expecting that the buyer will haggle and the price will have to go down when the deal is done.
So why do we rely on Idelista.pt statistics? Because we do not have more recent data. For a quick and approximate assessment of the current situation in the absence of more accurate tools, it will do. But we have to remember that the conditions may be very different from those initially stated by the seller when we enter the deal. We will be guided, but keep in mind that the prices there are the seller's "wants".
Long-term rentals in Lisbon district municipalities
The list of suburbs is shorter here. Apparently, in February - April on this site there were no offers for rent in all suburbs of Lisbon. Again the champion is Lisbon with 19.2 euros per square meter (average). The increase compared to February was only 1.59%, and compared to April 2022, a shocking 38.4%!
In Cascais, next to Lisbon: the price per meter in April was 17.5 euros, which is a decrease compared to February (- 3.31%). But at the same time the annual growth was 27.3%. In most of the other municipalities under consideration, the price of a rental meter has increased slightly since February, but the annual growth is impressive: from 19 to 29%. If someone is thinking about buying a home to rent on a long-term basis, it is useful to compare the growth rates of sale and rental prices in different municipalities.
Rent a property by the day in the municipalities of the Lisbon district
Since Lisbon is a point of attraction for tourists, for someone who plans to buy a property, it may be useful to evaluate the potential of different municipalities in terms of short-term tourist rentals.
For example, the All The Rooms service helps to pre-estimate the income from the housing to be rented, depending on its location and size. For forecasts, the service uses data on the average daily rental cost of similar housing rented in the same area of the city, as well as its occupancy rate. The service is interesting, but the most detailed information useful to the investor is only available in the paid version.
For example, the average cost of 1 day of rent in different municipalities of the Lisbon district for 3 months is available in the free version. The service gives prices in dollars, and in the table below they are converted into euros at the current exchange rate.
The table shows the number of properties published on the AirBnB travel rental service between February 7 and May 7, 2023, and the average price per night of renting that accommodation.
It is important to take into account that this data is not tied to the cost per square meter of housing, so the table shows the average values for all objects commissioned in this period (this may be both villas and studios). Nevertheless, even this data helps to begin to navigate the situation. The absolute leader in the number of rentals is Lisbon, however, it is behind Sintra and the municipality of Arruda dos Vinhos in the north-east of the region in terms of the high cost of tourist rentals. Cascais is once again on the heels of Lisbon in terms of rental prices.
Properties for sale in different areas of Lisbon
The table above shows the average price per square meter of real estate whose listings are 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 districts of Lisbon in the table are arranged in descending order of the average price per square meter in April 2023.
The absolute leader in terms of price per square meter is Santo António, a small (only 1.5 square kilometers) but densely populated (11,000 inhabitants) district in the very tourist center of Lisbon. Marquês de Pombal Square and Avenida da Liberdade are located there. The average price per square meter is 7.811 euros, which is the result of both quarterly growth (by 2%) and annual growth (11.6%).
This neighborhood is followed by the neighborhoods of Misericórdia, Avenidas Novas, Campo de Ourique, Estrela, Campolide and Santa Maria Maior with prices between 6.000 and 6.500 euros per meter. These areas are either in or adjacent to the historic center. These are prestigious locations full of attractions and tourists. Those who buy property there are likely doing so for business or investment purposes. The average price per square foot in almost all of these neighborhoods is either up slightly or down slightly from February 2023. On a year-over-year basis, all of these neighborhoods have shown a fairly low increase in the price per square meter, ranging from 0.6 to 14.6%. In fact, this is logical, since the starting prices were already high.
Then there are neighborhoods with prices between 5.000 and 6.000 euros per meter: Alvalade, Belém, Parque das Nações, Alcântara, São Vicente. They are also very prestigious, although some of them lie outside the center. For example, Parque das Nações (Parque das Nações) is a modern neighborhood of the capital. Neighborhoods in this group are attractive both in terms of buying for themselves and in terms of tourist business. As we can see, the change in property prices in these areas has not been uniform, neither in the perspective of 3 months nor in the perspective of a year. In fact, the most significant annual drop in prices of all areas of Lisbon is observed in this group: for example, in Alcântara a square meter is 15% cheaper than a year ago.
The list of neighborhoods where the price per meter is between 4.000 and 5.000 euros are: Arroios, Benfica, São Domingos de Benfica, Areeiro, Carnide, Ajuda, Penha de França, Santa Clara, and Beato. Among them are both peripheral areas and those closer to the center. In the vast majority of them, prices have increased slightly compared to February. And on a year-on-year basis, most of them have shown moderate growth, but also 2 of them, Santa Clara and Beato have shown the most impressive price increase per square meter of any district of Lisbon: 25-26%.
At the end of the list are three neighborhoods with a cost per square meter of 3,000 to 4,000 euros: Lumiar, Marvila, and Olivais. The last of these includes Lisbon Airport, and the other three are located around it. In these areas, values have fallen rather since February, but compared to last April, they have increased by 8 - 11%.
Let's now look at the rents in these areas of the city.
Properties for rent in areas of Lisbon
The table shows that long-term rental prices are rising at an astonishing rate. In fact, since February of this year they have not risen that much, but over the year, since last April, the changes are very noticeable: from 25 to 53%.
The list of areas with the highest rents in many positions coincides with the list of areas with the highest cost per square meter for sale. These are Santo António, Santa Maria Maior, Misericórdia, Estrela and Campo de Ourique. The most impressive annual growth was shown by quite expensive areas: Misericórdia (50.4%) and São Vicente (53.1%).
Daily property rental in Lisbon
We turn again to the service All The Rooms to assess the potential of different areas of Lisbon in terms of short-term tourist rentals. The table below shows the number of properties published on AirBnB between February 7 and May 7, 2023, as well as the average price per night of renting this accommodation.
This service provides information without reference to the cost per square meter of housing, so the table shows the average values for all objects commissioned in this period (which can be both penthouses and rooms).
According to these data, the most expensive for a tourist visiting Lisbon in spring will cost a night in the areas of Parque das Nações (130 euros), Avenidas Novas (112 euros) and Marvila (110 euros). The Arroios area has the largest number of vacation rentals (1,279 vacation rentals).
It is very interesting that the areas in which real estate is the most expensive to buy: Santo António, Mosericórdia, etc., I could not find on All The Rooms. Either the tricky service doesn't show this information in its free version, or it doesn't know these names.
The most expensive and cheapest real estate available for purchase in May 2023
Idealista.pt currently offers 9,216 homes for sale, some of them under construction, some of them even in the design phase and some of them as ruins to be rebuilt. Unfortunately, there's no filter to show actual ready-to-live homes, so you'll have to look carefully at all the listings.
The most expensive homes in Lisbon County for today are
Property in Mafra on 12 hectares. Village house of 1.300 meters, several additional buildings, swimming pool.
Three-storey house of 1.246 square meters, located on a plot of 2.133 square meters. 7 bedrooms, elevator, swimming pool and separate guest house. Located in the municipality of Sintra.
Minimal prices for finished homes in which you can live without immediately starting a major renovation:
The house has a strange "elongated" floor plan of 104 square meters. One bathroom, 2 bedrooms (the bedrooms are small and one of them has no windows). It is located in a village in the municipality of Cadaval.
Small house (only 46 square meters) with mezzanine and freshly renovated. One bedroom and one bathroom. Combined kitchen and living room. The municipality of Torres Vedras.
The most expensive houses in Lisbon city
Palace in Estrela. The area of the house is 950 square meters, the area of the plot 2.335 square meters. 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 of the series of "expensive-rich". I suspect that it is sold with the furniture. Perhaps someone wants to turn it into a hotel. Santa Maria Maior area.
Minimum prices for completed homes in Lisbon city, in which you can live without immediately starting a major renovation
Microscopic house (only 32 square meters) with one bedroom and one bathroom. There is air conditioning. Energy efficiency class E. Misericórdia neighborhood.
Now let's look at the apartments offered on portal 25.020. For example, let's take T2, that is, apartments with a living room and 2 bedrooms.
The most expensive apartments:
Apartment of 205 square meters on the second floor. 2 bedrooms, 3 bathrooms. The house has an elevator and concierge. 2 parking spaces. Energy efficiency class D. Lisbon, Santa Maria Maior.
Apartment sparsely populated house. The area is 175 square meters. There is a mezzanine. The 3rd floor. The building has an elevator and an underground garage. The house is located in Cascais on the first line from the ocean.
When searching for the cheapest apartment options, the first listings shown are those with apartments closed for viewing, apartments with tenants, and apartments from which only a portion is for sale. There are also more options without a license for residential units. I will not show all of these options.
Adequate options for living start from:
An 86 square meter apartment on the 6th floor. The house with an elevator. It was built in 1993. Energy efficiency class D. Municipality of Cadaval.
The apartment is 75 square meters. May need cosmetic repairs. Located on the 4th floor, there is no elevator in the house. No energy efficiency certificate. The municipality of Vila Franca de Xira.
When it comes to apartments in Lisbon, more or less decent options start from:
Apartment in the basement. 66 square meters. 2 bedrooms, 1 bathroom. Looks like a lot of windows and natural light. May need cosmetic repairs. Energy efficiency class F. Campolide neighborhood.
What conclusions can be drawn about the state of the real estate market in Lisbon this spring
Lisbon and its suburbs are the most popular places to live and invest in Portugal. Long-term rental prices are rising faster than the prices of apartments and houses for sale. And in Lisbon itself this trend is much stronger than in its suburbs. It is understandable that property owners want to get the most out of their assets. However, data from the National Institute of Statistics indicates that the actual sales are still very likely to be at lower prices than those that sellers indicate in their ads.
If we compare the specific offerings on Idealista.pt with what we saw in the winter, the listings are somewhat updated. Some of the apartments included in the February review are still unsold. On the other hand, there are new offers of smaller houses at lower prices and basement apartments at higher prices in the low-cost segment. It seems that apartments in Lisbon itself are selling out faster than in the suburbs, and now the cheap segment of Lisbon apartments has increased in price and worsened. In principle, there is nothing strange about this situation.
Whatever your real estate goals, through WithPortugal.com you can contact a professional realtor in Lisbon and other Portuguese cities. They will help you find the best solution for your individual situation.
I wish you a successful purchase!
Translated from Ukrainian by Rodion Shkurko