This article will introduce you to the dynamics of real estate prices in Madeira for sale, long term rentals and temporary rentals to tourists. The changes we are going to review cover the period from November 1, 2023 to January 31, 2024. We will also look at examples of the most expensive and cheapest properties currently available to buy in February 2024.
Real estate price dynamics in Madeira
Our analysis of the real estate market in the archipelago will begin by analyzing the statistics provided by the Idealista.pt website, which is one of the leading real estate resources in Portugal. Given that February is not yet over, we will turn to the data for the last three full months: November, December and January.
As we can see in the charts, prices per square meter for sale grew evenly during the year, and the growth was quite noticeable. But the prices per square meter for rent changed differently: from January to July 2023 there was a rather rapid growth, from July to November there was a decrease in prices, and from November prices started to grow again. Moreover, this growth was more active than the decrease at the previous stage.
The graphs presented here show the averages for all the municipalities of Madeira. In the following, we will examine the situation in each municipality of the archipelago in detail.
Real estate for sale in Madeira municipalities
This table shows the average price per square meter of real estate in the different municipalities of Madeira, according to the listings on Idealista.pt (columns 1-3). Column 4 shows the percentage change in price over the three months indicated: how much percent it has increased or decreased. Column 5 shows the change over the past calendar year. Municipalities are ordered by decreasing average price per square meter as of January 2024.
The list is topped by Funchal, the capital of the region, where in January a square meter cost an average of 3.228 euros. This price is the result of an increase, both quarterly (by 2.22%) and annual (by 20.1%). Funchal is followed by the municipality of Calheta with an average price per square meter of 3.027 euros. Quarterly growth was not so fast, 2.06%, but in terms of annual growth rate Calheta became the champion of the entire archipelago, 21.7%.
Almost approached the mark of 3,000 euros per meter in the municipality of Câmara de Lobos, where the average cost per square meter in the properties offered for sale amounted to 2,292 euros. Both quarterly and annual growth were not as pronounced as the two leaders of the table. Nevertheless, 17.8% annual growth is significant. Perhaps this municipality will soon exceed the 3.000 euros per meter mark.
The next group of municipalities have prices per square meter between 1,400 and 2,000 euros:
- The municipality of Santa Cruz, located in the southern part of the island of Madeira;
- Machico and Santana in the north.
Over the quarter, their prices did not change that much: from a small decrease of only 0.27%, which is at the level of statistical error, in Santana to an increase of 1.55% in Machico. Nevertheless, in year-on-year terms, all of them showed quite strong price increases, from 14.8% to 21.5%.
Should the statistics of the Idealista.pt website be trusted?
Idealista.pt is often the first source of information about the real estate market in Portugal for foreigners. However, the data presented on the platform, based only on advertisements from sellers and landlords, is not able to give a complete picture of the current state of the market, as it only reflects the position of property owners. In order to verify the validity of the information posted on Idealista.pt, it is necessary to make a comparison with data based on actual transactions. Such data is available for real estate sales and is provided by the National Institute of Statistics of Portugal.
The most up-to-date information on Madeira from the National Institute of Statistics is currently for the third quarter of 2023, covering the period July to September. In order to roughly assess the reliability of the data provided on Idealista.pt, we can compare the information for this period with the data for Q3 from both sources.
The table shows the average prices per square meter from the two sources (columns 1 and 2) and also shows the percentage difference between them (column 3). The report of the National Institute of Statistics for the third quarter of 2023 only mentions information on prices in Funchal. By comparing the data, it can be seen that real transactions were concluded at lower average prices per square meter than those indicated on Idealista.pt. The difference amounted to 13.07%, which can be explained by a number of factors.
Does it make sense to rely on the average prices per square meter that Idealista.pt shows us? In our case, the answer is yes, because only Idealista provides the most up-to-date data. However, when analyzing the real estate market in Madeira, it is important to understand that the data available at the moment can only give a general idea of the situation and are not always a true reflection of reality. These figures can only serve as a guide and not as an end point for decision-making. Potential home buyers are advised to contact experienced real estate agents in Madeira, familiar with the intricacies of the market and the peculiarities of the archipelago. This is the only way to get more accurate information and make an informed decision when buying real estate.
Long-term rental properties in Madeira
To learn about the dynamics of rental rates in Madeira, we turn again to the statistics of the portal Idealista.pt.
The statistics are available exclusively for Funchal. In January 2024, the average rental price per square meter was 14.5 euros. Since November last year, this figure has increased by 2%. The annual increase amounted to 24.2%.
Tourist rental properties in Madeira
Madeira's climate makes the island particularly attractive to Northern European tourists, who choose it as a winter vacation destination in the sun. For example, Funchal usually experiences average temperatures such as these:
- November: 21 degrees Celsius during the day, 17 degrees Celsius at night,
- December: 20 during the day, 15 at night,
- January: 18 during the day, 14 at night.
Not all European countries can boast such temperatures even in spring, what to say about winter.
Obviously, buying a property in Madeira can also be an investment in the tourism business. When considering Madeira real estate as an investment, it is important to consider the income potential from tourist rentals (alojamento local in Portuguese). There are various sources of information that help to do this. For an example, we refer to the All The Rooms service, which registers all properties rented through AirBnB, allows you to see the number and average rental rate per day of stay in the different municipalities of Madeira.
The table shows all the municipalities of Madeira. The first column contains the number of properties available for tourist rental in each of them, and the second column shows the average cost of accommodation per night in these properties between November 1, 2023 and February 1, 2024.
It is significant to note that the data from All The Rooms differs from the information on the Idealista.pt website and from data from the National Institute of Statistics, as it is not related to the average cost per square meter. Instead, overall average values are presented for all properties available for rent in a given period, regardless of their size.
Most rental properties are located in the municipality of Funchal (3.126), but the average price per night in this municipality is lower than in Ribeira Brava and Calheta. This difference may be due not only to the level of competition (e.g., it is higher in Funchal and lower in other municipalities), but also to the quality of the accommodation and the variety of housing types. For example, apartments and studios may be available in large numbers in Funchal, while villas may be more common in other municipalities. Given that villas are usually more expensive than studios, average prices in other municipalities may be higher than in Funchal. This is only one possible explanation.
Such information will help to assess the demand for rentals in different areas of Madeira but to choose an object for investment consciously, it is better to consult with professional real estate agents in Madeira, who, knowing the specifics of the archipelago, will help find a profitable option and warn against mistakes.
The most expensive and cheapest real estate available in February 2024
Idealista.pt currently offers 2,231 houses for sale. In this review, I will only include already completed properties.
The most expensive houses in Madeira today
6.000.000 euros
Two two-storey houses on a 5,000 sq ft lot. Main house with 4 bedrooms and 3 bathrooms. The second house can be used as a maid's house. Laundry and storage are also located there. No energy efficiency certificates. Municipality of Funchal. We saw this house in the summer and autumn price reviews for the same money.
5.500.000 euros
Restored 17th century manor house on a 1 hectare plot. 6 bedrooms, 8 bathrooms. Garage, swimming pool. Energy efficiency class E. Municipality of Funchal. This house was also featured in our spring review and has not yet been sold.
4.990.000 euros
A three-storey house with 4 bedrooms and 7 bathrooms. Private gym and outdoor sports court, small pool, garage, home cinema. Honestly, this property feels more like a hotel for a soccer team than a single family home. The lot is 2.3 acres. Bay views. Energy efficiency class A. Municipality of Funchal. This house was also featured in the spring price review and has not yet been sold either
Minimal prices for finished houses, which, judging by the photos, you can move in without major repairs and in which (again, judging by the pictures) will not have to deal with the invasion of mold:
90.000 euros
The house is 70 square meters with 2 bedrooms and 1 bathroom. There is a plot of 420 square meters. No energy efficiency certificate. Municipality of Santana.
95.000 euros
A small house, only 40 square meters with 1 bedroom and 1 bath in the countryside. There is a plot of 526 square meters. There is no energy efficiency certificate. Municipality of Porto Moniz.
100.000 euros
The house is 83 square meters with 4 bedrooms and 1 bath. There is a garage. The plot is 107 meters. No energy efficiency certificate. Municipality of Porto Moniz.
Let's study the offers of apartments in Madeira, of which 4.434 can be found on the Idealista portal. As an example, we will look at the T2 typology, that is, apartments with a living room and two bedrooms. The review includes only those properties where we can say with certainty that they are already commissioned or have real photos, not renderings. Also, we will not consider options that cannot be moved into immediately, such as apartments that are rented out or clearly require major renovation.
The most expensive apartments:
1.100.000 euros
An apartment in a new project. The author says it's finished. The area is 148 square meters. 2 bedrooms, 1 bathroom. Balcony. Garage is included in the price. Energy efficiency class is not specified. Municipality of Funchal. We saw this apartment in the summer.
995.000 euros
An apartment of 200 square meters in a residential complex built in 2022. 2 bedrooms, 2 bathrooms. Large terrace. There is a garage for 2 cars. Access to the house is equipped for people with reduced mobility. Energy efficiency class A. Municipality of Funchal. According to the website, this property was previously offered for 1.100.000 euros.
The cheapest apartments:
155.000 euros
An apartment of 84 square meters. 2 bedrooms, 1 bathroom, balcony. The house was built in 2000. Energy efficiency class D. Municipality of Funchal. According to the information on the website, this apartment was previously offered for 20.000 euros more expensive.
160.000 euros
The apartment has an area of 91 meters. 2 bedrooms, 1 bathroom. There is a garage. The apartment will need at least to replace the flooring in the living room. Energy efficiency class D. Municipality of Santa Cruz.
165.000 euros
An apartment of 78 square meters. 2 bedrooms, 2 bathrooms. The house was built in 2003 and does not have an elevator. The garage is included in the price. The kitchen is combined with the living room. Energy efficiency class E. Municipality of Santa Cruz.
180.000 euros
Apartment of 90 square meters. 2 bedrooms, 1 bathroom. The house was built in 2006. A place in the underground garage is included in the price. No heating. Energy efficiency class D. Municipality of Câmara de Lobos. According to the website, it was previously offered for 189.000 euros.
What can be said about the Madeira real estate market this winter to summarize
There is an interesting situation in Madeira, at least according to data from Idealista.pt. On the one hand, the site's statistics show that during both the last quarter and the last year, the average price per square meter of property in sellers' listings has been steadily increasing. And this growth has been much more visible than in other popular Portuguese locations such as the Algarve, Lisbon and Porto.
On the other hand, having studied the offers on Idealista.pt, we see that the vast majority of the most expensive options do not find their buyers, some even for 9 months. Moreover, the list of the most affordable options is replenished with even cheaper ones. On top of that, we see cases of sellers reducing prices for both the most expensive and the cheapest houses and apartments.
At the same time, the data on actual transactions, provided by the National Institute of Statistics, tell us that real estate will be bought at prices lower than those for which the objects were set up for sale.
If you are thinking of buying a house or apartment in Madeira and want to make the most of your current situation, through our website you can get in touch with experienced Madeira real estate agents who will help you find the perfect solution.
