Portugal House Prices Rise Despite Political Turmoil
Opinion
By Ivo de Noronha
House prices for sale in February saw an increase in 18 district capitals across Portugal, with Beja (21%), Setúbal (16.9%), and Vila Real (16.6%) leading the list. Significant rises were also observed in Santarém (15.5%), Évora (15.3%), Bragança (13.1%), Ponta Delgada (12.6%), Leiria (12.2%), Funchal (9.8%), Viseu (9.2%), Coimbra (9.1%), Braga (8.9%), Portalegre (7.7%), Guarda (7%), and Faro (5%). Meanwhile, Porto (3.6%), Viana do Castelo (3%), and Castelo Branco (2.8%) also recorded price increases. However, house prices remained practically stable in Aveiro (0.1%) and Lisbon (-0.4%), according to data from Idealista.
Lisbon continues to be the most expensive city for purchasing a house, with prices averaging 5,515 euros/m2. Porto (3,643 euros/m2) and Funchal (3,528 euros/m2) follow, with other cities such as Faro (3,069 euros/m2), Setúbal (2,673 euros/m2), Aveiro (2,475 euros/m2), Évora (2,370 euros/m2), Ponta Delgada (2,052 euros/m2), and Coimbra (2,033 euros/m2) also maintaining high price levels. More affordable cities include Guarda (851 euros/m2), Castelo Branco (893 euros/m2), Portalegre (903 euros/m2), Bragança (1,038 euros/m2), Beja (1,104 euros/m2), and Santarém (1,401 euros/m2).
The house price figures provided were as of the end of February, according to the Idealista price index. Notably, the Portuguese government collapsed on March 11, 2025, meaning that the current house price data does not reflect any potential impact from the government’s fall. However, the political turmoil was already brewing in the form of corruption scandals that had been making rounds for months, potentially affecting investor sentiment.
The collapse of the government, triggered by a confidence vote that the government itself requested, has raised skepticism. The administration, a two-party alliance led by the Social Democratic Party (PSD), had only 80 seats in the 230-seat legislature, making it vulnerable to opposition forces. While the government argued that the vote was necessary to “dispel uncertainty” amid an ongoing political crisis, critics have questioned whether deeper political forces, or even external actors, could have played a role in the turmoil. Some speculate about the involvement of US-based leftist financier George Soros, who, according to critics, has extended his influence across Europe and is now aiming to destabilise its political landscape.
As Portugal heads toward its third general election in three years, it can be acknowledged that uncertainty looms over the real estate market. Although housing prices have continued their upward trajectory despite political instability, the long-term impact of ongoing governance challenges remains to be seen. Investors and buyers will be closely monitoring how the upcoming elections on May 18 shape the country's economic policies and market confidence.
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