Portugal’s housing market has shown its first sign of slowing in almost two years, but buyers should not confuse slower growth with falling prices.
According to INE, Portugal’s Housing Price Index rose by 17.8% in the first quarter of 2026. That is 1.1 percentage points lower than in the final quarter of 2025, marking the first slowdown since the second quarter of 2024.
The headline is important, but the context matters more. Prices are still rising at a very high rate, especially in the existing homes market, where values increased by 19.7% year-on-year. New housing rose by 12.6%, showing that the strongest pressure remains in the resale market.
Fewer Homes Are Changing Hands
While prices continued to rise, the number of transactions fell. Between January and March 2026, 37,745 homes were sold in Portugal, down 8.7% compared with the same period last year and 12.4% lower than the previous quarter.
This suggests a market where demand has weakened, but not enough to bring prices down. Buyers may be more cautious, financing may be more selective, and sellers are not yet under enough pressure to reduce prices meaningfully.
Existing homes accounted for most activity, with 30,356 transactions, representing just over 80% of total sales. New homes accounted for 7,389 sales, with a sharper annual fall in transaction volume.
Foreign Buyer Activity Falls
The data also shows a clear reduction in purchases by buyers with tax domicile outside Portugal. Foreign-domiciled buyers completed 1,770 transactions in the first quarter, down 15.6% compared with the same period in 2025.
The decline was slightly stronger among European Union buyers, where transaction volume fell by 16.8%. Buyers from other countries also reduced activity, with transactions down 14.4%.
For the Portuguese property market, this matters because international demand has been an important factor in higher-value segments, particularly in Lisbon, the Algarve, Madeira and other lifestyle-driven markets.
A Slower Market, Not A Cheaper One
Regionally, every part of Portugal recorded fewer transactions compared with the first quarter of 2025. The largest falls were seen in Madeira, the Azores and the Algarve.
Even so, transaction values continued to rise in several regions, including the Setúbal Peninsula, Oeste and Vale do Tejo, Alentejo and the North. This reinforces the main message from the data: Portugal’s housing market is slowing in volume, but prices remain resilient.
For buyers planning a move to Portugal, the first quarter of 2026 points to a more selective market. There may be less competition in some areas, but the idea of a broad price correction is not yet supported by the data.
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