Portugal's Average Home Now Costs a Record €262,839 Even as Sales Slow and Foreign Buyers Retreat

The average home in Portugal changed hands for €262,839 in the first quarter of 2026, the highest figure the Instituto Nacional de Estatística (National Statistics Institute, or INE) has ever recorded. Prices are still climbing fast — the national house-price index rose 17.8% year on year — but two things beneath that headline suggest the market is finally shifting gear: the pace of price growth eased for the first time in about two years, and the number of homes actually sold fell.

Just 37,745 properties were transacted in the quarter, down 8.7% on the same period a year earlier. Used homes, which make up roughly four-fifths of the market, fell 8%, while sales of new-builds dropped a sharper 11.6%. In other words, prices are being pushed up not by a buying frenzy but by scarcity: fewer homes are trading, and the ones that do are setting records.

A widening geography of unaffordability

The national average hides enormous regional gaps. Greater Lisbon remains in a league of its own at €422,214, followed by the Algarve at €385,554. Greater Porto sits at €266,124, while the North region as a whole averages €223,243. The fastest climber was the Setúbal Peninsula, up around 25% year on year — a textbook sign of buyers priced out of the capital spilling across the river in search of something they can afford.

Foreign money is a smaller part of the picture than the headlines about golden visas once implied, and it is retreating at the margin. Non-resident buyers purchased 1,770 homes in the quarter, down 15.6%, though at a hefty average of €449,416 — up 19% — confirming that overseas purchasers still cluster at the top of the market. Discounting, meanwhile, has all but vanished: only about 8% of listings carried a price cut.

The affordability squeeze is the mirror image of trends elsewhere in the economy. Building the housing is getting dearer too, with new-build construction costs up 6.9%, driven mainly by labour. Property-related taxes are swelling municipal coffers, as seen in the 84% jump in council surpluses. And the strain feeds a wider public gloom, captured in the finding that four in ten Portuguese feel worse off than a year ago.

What This Means for Expats

• The bargain window is narrowing: With only 8% of listings discounted and prices at record highs, aggressive lowball offers are unlikely to land in Lisbon, Porto or the Algarve. Interior regions and the Setúbal Peninsula still offer more room to negotiate — for now.
• Look beyond the obvious hubs: The North at €223,243 and much of the Alentejo remain a fraction of Algarve prices. Buyers willing to trade coastline for countryside get dramatically more space per euro.
• Renovation is not a tax loophole: Falling new-build sales are pushing some buyers toward fixer-uppers, but the Tax Authority recently ruled that buying a ruin to rebuild will not shield your eventual gains from IRS. Budget for the tax, not just the works.
• Inherited property is easier to sell: Parliament has just made it simpler for a single heir to unblock the sale of an undivided estate — relevant if you are navigating a Portuguese inheritance.

The picture emerging in 2026 is not a crash but a stalemate: prices too high for many buyers, yet too few homes on the market to force sellers to blink. Until construction accelerates or demand cools further, the record numbers are likely to keep coming — even as fewer and fewer people can act on them.