Portugal's average home price hits €430,000, deepening housing crisis

In May 2026 the average advertised price of a residential property in Portugal reached about €430,500, meaning that a budget of €400,000 is often insufficient to buy a home. Prices are especially high in Lisbon, Porto and the Algarve, where demand has long outstripped supply.

Industry experts point to a chronic shortage of new housing and to high costs of land, construction, labour, design and taxes as the main drivers. A government programme that guarantees up to €450,000 for first‑time buyers aged 18‑35, with state backing of up to 15% of the loan, has been blamed for further pushing prices upward.

The International Monetary Fund has recommended that Portugal temporarily suspend some of these housing measures, warning that the rapid rise in potential buyers is outpacing the limited supply and could create market imbalances. The situation mirrors broader housing affordability challenges across Europe.