Lisbon prices: growth cools as new supply arrives

Lisbon has been one of Europe’s fastest-appreciating property markets for a decade, driven by tourism, foreign buyers and a long period of low supply. In 2026 the pace has slowed. Prices are still rising in most central parishes, but at a rate closer to five per cent a year than fifteen, and some buyers are beginning to find room to negotiate.

Several forces are at work: rising construction activity, tighter rules for short-term rentals, the end of property-based residence schemes and affordability limits for local households. This article looks at each and what they mean for people who want to buy.

More homes on the way

The city has approved thousands of new units in recent years, including projects along the Tagus waterfront in Parque das Nações, Beato and Alcântara. As these buildings complete, buyers have more choice, and developers compete on finishes, payment plans and energy performance. Off-plan purchases typically involve staged deposits during construction, with the final payment on delivery.

The new supply is concentrated in the mid-to-upper price band. Buyers searching for affordable homes below €250,000 within the city still face scarce stock, and the competition for renovated flats in older neighbourhoods such as Graça and Arroios remains strong.

Policy: fewer tourist lets, fewer visa-driven buyers

The ban on new Alojamento Local licences in many central parishes has removed a source of investor demand. At the same time, the golden visa scheme no longer qualifies direct property purchases, which means fewer purchases by buyers motivated mainly by residence rights. The effect has been a more owner-occupier market.

Tax changes for foreign residents, including the end of the non-habitual resident regime for new applicants and the arrival of a new incentive for scientific and innovation work, also shape who relocates to the city. Digital nomads and remote workers continue to arrive on visas such as the D8, which supports demand for rentals in the centre.

• Prime central parishes: prices up about 4% to 6% over twelve months
• Waterfront new-builds: stable, with developer incentives on offer
• Outer areas such as Odivelas and Amadora: faster growth from a lower base
• Rents: up around 5% in the year, with demand strong for furnished mid-term lets

How to buy well

Check the licensing history and the condition of the building, including the energy certificate and the condominium’s reserve fund. For off-plan purchases, confirm that the developer holds the building permit and the necessary bank guarantee for your deposits.

Budget for IMT, stamp duty, notary and registration fees of roughly seven to eight per cent of the price. Compare mortgage offers from Portuguese banks, which lend up to 80 per cent to non-resident buyers in some cases but require more paperwork than in many countries.

Looking at the wider picture, Lisbon is behaving like a maturing market rather than a bubble: price growth has slowed without a collapse in transactions, and the buyers who remain are better informed and more patient than in the rush of earlier years. That is healthy for anyone planning to live in the city long term.

Short-term investors face a harder path. Without the option of a tourist licence, returns depend on traditional or mid-term rentals, where gross yields in central Lisbon are now around four to five per cent. Our Lisbon desk can model a purchase under each scenario and explain the current rules for rent increases and tenant protection.

As always, take independent legal advice before signing a promissory contract, and confirm every figure in this article against current sources.

The figures in this article are illustrative observations from Halvenor’s fictional demonstration desks and are not real market statistics.