Late summer and early fall in Madeira are probably the most pleasant periods to be in the archipelago. Sunshine, warmth and beaches... By November, the temperature drops, but remains quite comfortable. Let's find out if the real estate market in Madeira is as favorable as the weather there. In this article, we will analyze the prices of houses and apartments for sale, long-term rentals and tourist rentals, as well as study the sales offers available today.
Real estate price dynamics in Madeira
We will start our exploration of the archipelago's real estate market by looking at the statistics provided by Idealista.pt, one of the main real estate resources in Portugal. Since November is not over yet, we will look at the data for the last 3 full months: August, September and October.
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 prices per square meter for rent grew at different rates until July of this year. Since July, a very gradual decline began. These graphs show the average values for all the municipalities of Madeira. In the following, we will look at each municipality separately.
Real estate for sale in Madeira municipalities
The table shows the average price per square meter of real estate in the different municipalities of Madeira, as shown in the sales listings on Idealista.pt (columns 1-3). Column 4 shows the percentage change in price over the three months indicated: by how many percent it has increased or decreased. Column 5 shows the change over the past calendar year. The municipalities in the table are ordered by decreasing average price per square meter as of October 2023.
The most expensive municipality is Funchal, the capital of the region, where in October a square meter cost an average of 3.105 euros. This price is the result of both quarterly (up 3.64%) and annual (up 20.1) growth.
Funchal is followed by 3 municipalities with an average price per square meter from 2.200 to 3.000 euros: Calheta, Ribeira Brava and Câmara de Lobos, all located in the southwest of the island. In all of them, prices have risen quite modestly since August (about 2%). But the annual increase was impressive, from 20% and more. The champion in terms of annual growth in the entire region was the municipality of Calheta (30.6%).
The next group of municipalities have prices per square meter between 1.400 and 2.000 euros:
- Located in the southern part of the island of Madeira, the municipality of Santa Cruz;
- Machico and Santana in the north.кі знаходяться на півночі.
Prices per square meter there varied more differently than in the previous group. The leader in quarterly growth was Machico with 9.56%, but in the municipality of Santana, on the contrary, there was a decrease in price of 1.73%. Surprisingly, Machico showed the lowest growth for the year, since October 2022, only 12.1%, which looks more than modest against the background of other municipalities.
Чи можна вірити статистиці сайту Idealista.pt?
The Idealista.pt platform is the best known resource in Portugal for finding a residence. It is often the only source of information on the real estate market for foreigners. At the same time, the statistics presented on this resource are based only on ads from sellers and landlords posted on the same platform. Obviously, it cannot fully reflect the real state of affairs in the market, as it does not consider information about real transactions. To verify the validity of the data from Idealista.pt, it is necessary to compare it with the information on actual transactions available on the website of the Portuguese National Institute of Statistics.
The most current data available for Madeira today is for the second quarter of 2023 (April – June). We can compare the available data for the second quarter from both sources to roughly assess the reliability of the figures presented on Idealista.pt.
The table contains the average prices per square meter from the two sources, as well as the percentage difference between them. The report of the National Institute of Statistics for the second quarter of 2023 only included data for Funchal, without information on other Madeira municipalities. By comparison, it can be seen that in the second quarter of 2023, actual transactions were concluded at a lower average price per square meter than the prices reported on Idealista.pt. The difference amounted to 13.36%. This discrepancy may have many explanations.
So, should we trust the price statistics on Idealista.pt? In the case of Madeira, it is more of a rough estimation tool, as there is no more accurate data available at the moment. It only gives a general idea of the situation, but it cannot be relied on completely. Those who are considering buying a home in Madeira should consult an experienced real estate agent familiar with the intricacies of the Madeira archipelago.
Long-term rental properties in Madeira
Let's take another look at Idealista.pt to examine the changing prices of long term rentals.
Once again, data is only available for Funchal. In October 2023, the average rental price per square meter was 13.7 euros. Since August, this figure has decreased by 3.52%. This decrease, however, did not prevent annual growth: since October 2022, rental prices per square meter rose by 19.4%.
Tourist rental properties in Madeira
When considering buying a home in Madeira as an investment, it is important to assess the potential income from short-term tourist rentals. For this purpose, you can refer to All The Rooms, which provides information on the number of properties available for tourist rentals in Madeira through the AirBnB platform, as well as the average cost per day in the different municipalities of Madeira.
The table lists all the municipalities of Madeira. The first column shows the number of properties available for tourist rentals in each of them, and the second column shows the average cost of accommodation per night in these properties.
It should be noted that data from All The Rooms, unlike information from Idealista.pt and the National Institute of Statistics, is not related to the average cost per square meter. Therefore, general average values are presented for all properties rented during this period, regardless of their size (from large villas to rooms).
Most rental properties are located in the municipality of Funchal (2.912), but the average price per night in this municipality is lower than in Ribeira Brava, Calheta and Santa Cruz. This difference may be due to both the higher competition in Funchal and the variety of accommodation on offer in the other municipalities. For example, in Funchal it may be apartments or studios, while in other municipalities it may be villas. Given that villas are usually more expensive than studios, statistically prices in other municipalities may be higher than in Funchal.
This comparison can serve as a starting point for exploring the potential of real estate in Madeira as an investment destination.
The most expensive and cheapest real estate available in November 2023
Idealista.pt currently offers 2,247 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-story houses on a plot of 5.000 sq.m. 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. This is the house we saw in the summer price review.
5.500.000 euros Restored 17th century manor house on a plot of 1 hectare. 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. But surprisingly, it is now on the market for a million euros more!
4.990.000 euros A three-story house with 4 bedrooms and 7 bathrooms. Private gym and outdoor sports field, small swimming pool, garage. Plot of 2.3 hectares. Energy efficiency class A. Bay view. Municipality of Funchal. This house has already appeared in the spring price review and has not yet been sold.
Minimal prices on finished homes where you can move in without major renovations right away:
107.000 euros A house of 64 square meters with 1 bedroom and 1 bathroom. There is a garage. There is a plot with a garden. Energy efficiency class E. Municipality of Santana.
130.000 euros A two-story house of 90 square meters. 3 bedrooms, 1 bathroom, a terrace, and a balcony. The first floor is for utility, so will need renovation if the buyer wants to make it habitable. There is a garage. No heating. Energy efficiency class F. Municipality of Calheta.
Let's move on to apartments, of which there are 2,388 on the portal. Numerous offers, especially expensive ones, are either still obviously under construction, or the advertisement says nothing about it, but there are no real pictures. In this review, I have included only objects where we can say for sure that the object has been commissioned, or where there are real pictures. For example, let's take the T2 typology, i.e., apartments with a living room and 2 bedrooms.
The most expensive apartments:
1.300.000 euros An apartment of 214 square meters in a residential complex built in 2020. 2 bedrooms, 3 bathrooms. 5th floor in a house with an elevator. Sold with furniture and appliances. Energy efficiency class A. In the house, there is a swimming pool and a gym. Municipality of Funchal. We have seen this property on the market since spring.
1.100.000 euros An apartment in a new project. It says that the construction is finished. Area of 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.
The cheapest apartments:
155.000 euros An apartment of 75 square meters on the first floor. 2 bedrooms, 1 bathroom, and a balcony. The house was built in 1988. Energy efficiency class C. Municipality of Machico.
160.000 euros Apartment of 98 meters. 2 bedrooms, 1 bathroom. The house was built in 2004. Garage included in the price. Energy efficiency class E. Municipality of Santa Cruz.
160.000 euros Apartment of 75 meters. 2 bedrooms, 1 bathroom. The house was built in 2003. Garage is included in the price. No heating. Energy efficiency class D. Municipality of Santa Cruz.
In summary, what can be said about the Madeira real estate market this fall
Having studied information from various sources, we can say with certainty that the value of housing in advertisements from sellers has increased throughout the year in every municipality in the region. However, there are reasons to believe that the demand for real estate in Madeira is not as high as in other well-known places in Portugal, such as the Algarve, Lisbon, and Porto. Firstly, listings for the most expensive properties that were put up for sale 3–6 months ago are still on the website. Secondly, by analyzing the statistics of actual transactions, we can conclude that the actual sale prices are significantly lower than what a buyer would expect based on Idealista's data.
At the same time, the cheapest housing options presented on the portal, not only have been sold in the 3 months since the last review, but also the very bottom bar of the objects that meet the search criteria has skyrocketed. If in summer, it was possible to buy a house for 90.000 euros and an apartment from 129.000 euros, now more or less acceptable options start from 107.000 and 155.000, respectively.
The largest centers of attraction for tourists are Funchal and Calheta, which is where most tourist rental properties are located.
Whether you are interested in Madeira real estate for personal or investment purposes, WithPortugal.com has experienced real estate agents ready to help you find and purchase the perfect property.
Translated from Ukrainian by Rodion Shkurko
