Portugal's housing market records 7% rise in Q2 sales amid coastal demand surge

In the second quarter of 2026, 39,210 homes were sold in Portugal, a 7% increase over the previous three months after a 12.1% drop in the last quarter of 2025. The rebound was broad‑based: the Lisbon metropolitan area recorded 11,790 transactions (up 7%), the Porto metropolitan area 6,500 sales (up 7.9%), and the Algarve 2,875 sales (up 6.3%). The median sale price reached €325,342 and the typical time on market was five months. Analysts attribute the lift partly to stalled Euribor rate rises and a calmer Gulf of Persia conflict, which boosted consumer confidence.

Demand remains heavily coastal, with 85% of housing searches focused on the coastline. Lisbon accounts for 22.9% of all searches, Porto 20.2% and Setúbal 10.4%, while interior regions such as Santarém hold 37.1% of interior demand. Price gaps persist: average sought price is about €260,000 on the coast versus €155,000 inland. Coastal price declines were recorded in Lisbon (‑5.9%), Madeira (‑6.7%) and the Azores (‑13%), whereas inland districts like Castelo Branco (+16.7%) and Beja (+9.0%) saw price increases.

A market study warns that supply constraints—shortages of construction workers, high building costs, limited buildable land and slow licensing—continue to pressure the sector. Almost two‑fifths of recent price growth is not explained by economic fundamentals, though Portuguese families are now less indebted than in previous cycles.