Luxury homes: a dynamic and ever-growing market

It is well known that the luxury real estate market is not affected by crises. We saw this during the pandemic and now, with the war. It is a market that is constantly growing and, regardless of the scenario, always has potential and interest. Buyers give preference not only to location but also to associated services.

According to Portugal Sotheby's International Realty's report on trends for this year, the global luxury real estate market "remains resilient, with encouraging signs of stabilization in property supply in premium locations around the world."

In Portugal, the trend is no different. Sotheby's says that, in our country, this market "continues to show robust performance, reflecting both national and international demand."

In 2024 alone, Sotheby's International Realty recorded a 20% growth compared to the previous year, with an average property sales value of around 1,030,269 euros. Regions such as Lisbon, including Cascais and Sintra, Porto, Algarve, Madeira and Melides/Comporta/Tróia continue to lead demand, with the development area standing out with an impressive growth of 200% compared to 2023. «In addition, the integration of technologies, sustainable solutions and exclusive amenities has been redefining the concept of luxury, making Portugal an increasingly valued destination for those seeking quality of life and solid investments».

According to idealista's most recent analysis of the luxury market, "everything indicates that potential luxury buyers in Portugal are looking for homes that combine the best of both worlds: the charm of living near the beach, with all the advantages that living near a big city can bring, from health services to multiple leisure activities."

The same analysis adds that, in the case of luxury homes priced at over one million euros, demand is highest in Oeiras and Lisbon and that interest in purchasing high-end apartments also exists in several municipalities close to the capital, such as Sintra, Mafra and Loures, followed by the municipality of Lisbon itself.

This geographical analysis reveals that “the municipalities in the interior of the country have a scarce supply (less than 10 advertised properties) or even nonexistent” and that, therefore, the lack of houses to buy in the interior “ends up limiting the choices of those looking to live in the countryside, enjoying the serenity of nature exclusively”. Évora is the exception as it occupies 6th position in the ranking of housing demand.

Idealista also analysed the supply of premium housing – which is in much greater demand than apartments – and found that the municipalities of Cascais, Loulé, Lagos, Sintra and Albufeira were where the most properties were registered on the market in the quarter ending in February 2025. These five municipalities in Greater Lisbon and the Algarve alone – which allow for a combination of beach and city life – account for almost half of the approximately 13,700 homes for sale in the 82 municipalities analysed. In Porto, 580 luxury homes were listed for purchase, a higher supply than in Lisbon (408).

The number of luxury apartments for sale in the country has fallen by almost half (7,300), with Lisbon and Cascais representing 60% of the total supply recorded in just 29 municipalities with representative samples. Porto is in third place, with 760 premium apartments on the market, according to the same data from idealista.

While the stock of luxury apartments is more concentrated in the Lisbon, Porto and Algarve areas, the supply of high-end homes available for purchase «ends up being more dispersed throughout the country, but always close to the coast and islands, offering a wider range of possibilities for those looking to live near the beach, in the city or even combine both worlds». On the other hand, «the supply of both types of housing is scarce or almost non-existent in the interior, reducing the choice for those looking to live in the countryside».

To Nascer do SOL, a source from idealista says: «The luxury market in Portugal remains dynamic and resilient, driven by national and international buyers looking for quality of life, security and a favorable climate», adding that, «as these buyers do not depend so much on bank credit, the luxury segment has been less affected by market fluctuations and continues to grow, even in a context of crisis in access to housing for the majority of Portuguese people».

Alda Filipe, partner and regional director of Kronos Real Estate Group, told our newspaper that the luxury real estate market, especially in the Algarve, “continues to be dynamic and resilient”. Traditionally, she adds, luxury “has been associated with the grandeur of properties, quality finishes, top-of-the-range amenities and high safety standards”. But “the post-pandemic context, the change in mentalities and the arrival of new nationalities, such as North Americans, have brought a new way of looking at luxury”.

Alda Filipe says that today, for many buyers, “true luxury lies in authenticity, low building density, proximity to the sea, connection with nature and the experience of sustainable spaces that are well integrated into the landscape”.

Who buys?

The purchase of a luxury property is inevitably associated with purchasing power, so it is not surprising that foreign clients gain more weight than national ones. Idealista told our newspaper that, at the beginning of 2025, the United Kingdom led the international demand for luxury homes in Portugal, with 15% of foreign interest, followed by the USA with 13.1%. Germany, Spain, France and the Netherlands account for between 10% and 5.5% of demand, while Brazil occupies seventh place, with less than 5%.

In relation to the municipality of Lisbon, he states that the most significant demand for luxury homes for sale comes from the USA, Spain, the United Kingdom and Brazil, while in the municipality of Porto he highlights the interest shown by those living in the USA, Spain and France. On the Portuguese islands, there is a high level of interest from Germany, the United Kingdom and the USA for luxury homes for sale in Funchal. And in Ponta Delgada, the greatest international demand comes from the USA, Canada and Germany.

It is true that the Portuguese are not left out. “The demand for homes worth more than one million euros saw a strong start at the beginning of this year, led by Portuguese citizens, who account for 73% of demand”, noting that, in both Lisbon and Porto, “only around one in five potential buyers of luxury homes are foreigners”.

Alda Filipe, meanwhile, says that the British, Irish and, more recently, North Americans, remain at the forefront of demand for the luxury segment in the Algarve, with particular emphasis on areas such as Vale do Lobo, “where market consolidation and historical appreciation have reinforced the attractiveness of investment”. However, she told our newspaper that “there has been a very significant increase in demand from Portuguese buyers, namely families and investors who recognise the value of assets in prime and consolidated locations”, adding that for national clients, the Algarve is no longer just a holiday destination “but is also a safe investment option and an opportunity for consistent asset appreciation in the medium and long term”.

What is valued

According to an official source from idealista, in the luxury segment, buyers tend to prefer houses over apartments. “There are two criteria that weigh heavily in this choice: the greater supply available and the more affordable price per square meter. In Portugal, there are almost twice as many luxury houses for sale compared to apartments, and house prices are, on average, 27% lower per square meter. This means that it is possible to find larger houses, with a swimming pool, garden and other amenities.” And he leaves no room for doubt: “Those looking for a luxury home want space, comfort and exclusivity and, at the moment, houses offer exactly that with a better quality/price ratio.” Even so, he acknowledges that there are increasingly more luxury residential projects, such as apartment complexes, that offer all kinds of premium services, “making apartments an increasingly attractive option for those who value amenities such as security, spa, gym or high-quality communal areas.”

Alda Filipe also says that the most valued criterion in the luxury segment continues to be location and mentions that the profile of the current luxury buyer values ​​contemporary architecture projects integrated into the territory, which provide authentic experiences and are far from massified areas. «Privacy, exclusivity and the possibility of personalizing the property are also decisive, reinforcing the demand for unique or consolidated locations and differentiating concepts», she highlights.

The most expensive areas

Luxury, as we know, is not within everyone’s reach. According to The Wealth Report, Knight Frank’s flagship report, luxury residential property prices will continue to rise in 2024, with an increase of 3.6%, slightly higher than the 3.3% seen in 2023.

Of the 100 markets analysed by the Prime International Residential Index (PIRI), which features in The Wealth Report, 77 recorded positive annual growth and 20 saw prices fall. Asian and Middle Eastern markets occupy the top six spots in the ranking, with Seoul (18.4%), Manila (17.9%) and Dubai (16.9) leading the list. The report shows that markets in Saudi Arabia also performed strongly, with Riyadh (16%) and Jeddah (9.6%) in the top six. Aspen rounds out the top 10.

As for Portuguese markets, Porto is in 17th place with a growth of 6.8%, the Algarve in 25th place with 5.6% and Lisbon in 28th with 5.3%. The three national cities are ahead of markets such as Zurich, Barcelona, ​​Oslo or even Lake Como, in Italy, and Paris.

According to idealista, Lisbon and Cascais are the most expensive areas to buy luxury homes. But the Algarve also stands out. In fact, these are the places where the most expensive streets are located. This reflects, they say, “the intense demand from national and international investors”. The analysis reveals that living on the most exclusive street in the country costs, on average, 7,636,765 euros. This is, at least, the price asked by the owners of the exclusive Quinta do Lago development, located in Almancil, in the Algarve.

Completing the podium of this luxury ranking are Rua Garrett, in Lisbon, where buying a house has an average price of 4,062,154 euros, and Rua Birre, in Cascais (3,931,059 euros).

The fourth highest priced address for buying a house is located on Avenida Marginal, in the parish of Cascais and Estoril (3,622,688 euros). Next in the table are the exclusive Urbanização Quinta do Monte Funchal, located in Lagos (3,250,000 euros) and Rua de Buenos Aires, in the parish of Estrela, in Lisbon, where the average price of luxury housing is around 3,170,357 euros.

Next is Avenida da República, located in Cascais, which has houses with an average price of 2,897,308 euros. The list of the ten most expensive streets ends with Rua Glicínias, in Cascais (2,850,000 euros), Rua das Codornizes, also in Cascais (2,830,333 euros) and Rua dos Gladíolos, in Charneca da Caparica (2,706,818 euros).

The idealista told our newspaper that he was able to observe that the districts of Lisbon and Setúbal lead both in demand and supply of luxury housing in Portugal. «These two districts concentrate almost half of the national supply, which is justified by their proximity to the capital, where there is greater availability of jobs, cultural and leisure services and easy access via Lisbon's international airport». This set of factors, he believes, «makes these regions particularly attractive for Portuguese and foreigners looking for homes priced at over 1 million euros».

But in addition to these regions, the areas of the island of São Miguel (Azores), Leiria and Santarém also stand out, with a “significant demand”, “which offer a calmer lifestyle, combining smaller cities with close contact with nature”. However, in these districts, “the supply of luxury properties is quite limited, with less than 500 properties available for sale in each one”.

There are also studies that place Chiado as one of the most expensive areas in the world. It is in 30th place in a list of 49. Regarding data of this kind, José Cardoso Botelho warns that, “what happens is that, often, they are comparing a street in New York, or a street in three or four cities in the United States and they are not discussing the streets of all the most expensive cities in the United States”. He explains that “they are doing one per country and, therefore, there are 100 and Portugal appears with Avenida da Liberdade or Rua Garrett”. In these countries, he adds, there are many hundreds of streets that are much more expensive than Lisbon “but the ranking is more or less one per country. These are realities that are not comparable, just look at the transaction values”.

And he gives an example: «Not long ago, if I'm not mistaken, Christian Dior bought a store in Paris, on the Champs-Elysées, and the transaction was worth 600 or 700 million euros, and we're talking about a store that's not very big».

Segmented market

But while this market segment continues to show good dynamics, the rest of the sector is struggling with a housing crisis. A situation that, according to an official source from idealista, “shows how highly segmented the market is”. And it adds: “While many Portuguese families continue to face difficulties in accessing housing, mainly due to the lack of supply and high prices, the luxury segment remains dynamic, driven mainly by national and international buyers and investors with great financial capacity, less dependent on bank financing”.

And, in his opinion, despite the relief in interest rates, the crisis in access to housing persists and can only be resolved with a significant increase in supply. “It is essential to build more housing in Portugal, with a special focus on affordable solutions for families with fewer economic resources, ensuring a more balanced and inclusive market”, he concludes.

Alda Filipe also points to this segmentation, considering that it is becoming increasingly clear, «where the luxury segment operates with its own dynamics and is less sensitive to the fluctuations that affect other sectors. Strong international demand, the appreciation of the territory and the exclusive, low-density supply ensure stable and, in many cases, growing demand. Less is more – scarcity has become a true synonym for luxury here» and gives the Algarve as an example: «The luxury segment in the Algarve – especially in consolidated areas such as Vale do Lobo – continues to register consistent and above-average demand. This performance is the result of the scarcity of product in privileged locations, the solidity of the continued appreciation of properties and the exceptional quality of life that the region offers, factors that maintain the Algarve as one of the destinations of choice for investment and residence».