Foreign Funds Spark a New Property Boom Across Portugal in 2025

An unfamiliar sound has returned to the Portuguese property scene this year: the roar of large-ticket deals closing before summer has even ended. Foreign capital is flooding back, retail malls are changing hands, and trophy hotels from Cascais to the Algarve are signing new owners. For anyone living in Portugal or scouting a relocation, the takeaway is simple—prices and competition are rising again, but so are the opportunities to ride the wave.

Portugal climbs the European investment podium

Over the past decade overseas buyers have supplied roughly 75 % of all commercial real-estate funding, yet 2025 marks the first time Portugal appears in the CBRE Investor Intentions Survey as a top-tier destination alongside Berlin and Amsterdam. That upgrade matters: it signals to global pension funds and sovereign wealth managers that Lisbon and Porto now sit in the same risk bucket as better-known capitals. Deals worth €1.23 B closed in the first six months alone, up 78 % on the same period last year. Advisory firm Prime Yield is already hinting that the market could sprint past €2.5 B before December, smashing every forecast drawn up in January.

Who is writing the cheques?

The cast of buyers has widened. Spanish family offices snapped up landmark hotels such as the five-star Cascais Miragem for €125 M, while Swiss and British funds jostled with Portuguese institutions to secure the Nosso Shopping and Fórum Madeira malls—together worth more than €130 M. North- and South-American private investors, long focused on residential visas, are pivoting toward income-producing assets now that the real-estate route to the Golden Visa has vanished.

Retail and hospitality steal the spotlight—again

Retail absorbed almost €616 M in the first half, nearly half of the total market. Footfall in shopping centres is back at, or above, pre-pandemic levels thanks to record tourism and a consumer confidence rebound. Prime high-street yields in Lisbon have compressed to ≈4.25 %, underlining intense demand for flagship storefronts on Avenida da Liberdade and Rua Augusta.

Hotels followed with €330 M in transactions. Portugal welcomed 13 % more visitors this summer than last, and metrics such as RevPAR (+8.4 %) and ADR (+8.2 %) continue to outpace southern-European peers. Operators are less worried about new-build permits than about finding stock to refurbish, so investors have begun repositioning older resorts into lifestyle brands that speak to digital nomads and long-stay retirees.

Residential prices march upward despite policy twists

For newcomers hunting a home, the headline is blunt: national house prices jumped 16.3 % year-on-year in Q1. Lisbon averages €4,600 / m²; Porto, €3,000 / m²; the country overall, €2,500 / m². Government measures—loan guarantees for under-35s, IMT exemptions, tighter rules on short-term lets—have boosted demand but barely scratched the supply problem. Until construction pipelines widen, upward pressure on values is likely to persist.

Cheaper money reshapes the yield map

With the European Central Bank expected to cut its deposit rate to 2 % by year-end, banks are loosening loan-to-value ratios and trimming spreads. CBRE says 78 % of European lenders plan to originate more real-estate debt in 2025, betting that stabilising inflation near 2 % will keep credit risk contained. Prime yields in Lisbon stand around 5.30 % for offices, 4.75 % for retail, and 5.75 % for hotels—still a premium over Madrid or Milan, a gap that is luring yield-hungry funds.

Regulation: from Golden Visa exit to ‘Mais Habitação’ tweaks

The removal of property from the Golden Visa menu in late-2023 initially rattled luxury-home sales, yet the commercial market barely flinched. Investors simply redirected applications toward fund units, job-creation schemes and cultural projects, channels the government now promises to streamline. Meanwhile, the more controversial aspects of the 2023 ‘Mais Habitação’ package—such as mandatory leasing of vacant flats—were rolled back under the ‘Construir Portugal’ programme last year, easing fears of heavy-handed intervention.

How this affects foreign residents and would-be movers

Inflows of global capital generally translate into better-quality stock—think energy-efficient offices, revamped student housing and senior-living complexes that meet international standards. The flip side is fiercer bidding for well-located homes and higher rents in cities where supply lags. Expats who buy early, lock in fixed-rate mortgages before the ECB’s easing cycle reverses, or partner with developers on build-to-rent projects could capture upside while hedging inflation.

Looking ahead

Consultancies JLL and BNP Paribas Real Estate forecast that Portuguese transaction volume will grow ≈20 % in 2025, the fastest among 19 European countries. If that scenario materialises, Portugal’s real-estate story will shift from comeback to outperformance, cementing the nation’s status as both a lifestyle haven and a serious investment hub. For foreigners already enjoying the sun—and for those still plotting the move—the message is clear: the market’s next chapter is being written now, not later.