Portugal Real Estate Market Outlook 2025

2024 was a year of adjustment and growth for the Portuguese economy, with reduced inflation and key interest rates decreases. The economy performed positively, given the broader European context, and real estate investment showed signs of recovery.

What to expect in 2025? The outlook is optimistic: economic growth, favorable financing conditions, interest rates decrease, alongside with the convergence of buyer and seller expectations. The real estate market in Portugal is expected to continue the upward trajectory, with increased transactions and higher investment volumes, potentially reaching 2.5 billion euros, an 8% year-on-year growth. Retail and hotel sectors are expected to attract the most investment for the third consecutive year.

In the occupational markets, activity is expected to intensify throughout the year. In the office sector, the demand for high-quality buildings will drive prime rents upward. The same is expected in the industrial and logistics sector, benefiting from the growing trend of industrial nearshoring and its logistical implications. In the high street retail sector, where lack of availability marked the scenario in 2024, new stock currently under construction is expected to reach the market. A strong performance is anticipated in the main high street axis in 2025, both in terms of occupancy and rents. The hotel sector is expected to perform positively, in line with the substantial growth experienced in 2024. Sustainability will be a cross-cutting theme, and stricter regulations impacting real estate development and management.