Key figures — as of 2026-09-22: House Price Index up 16.5% year-on-year in Q2 2026, down from 17.8% in Q1 — a 1.3 percentage-point slowdown; 40,142 homes sold in Q2 2026, down 6.4% year-on-year; third straight quarter of falling transactions (-4.7% Q4 2025, -8.7% Q1 2026, -6.4% Q2 2026); existing-home sales fell 6.6% to 32,307 units while new-home sales dropped 5.7% to 7,835 units — source: INE.
Prices still climbing, just a little slower
Portugal's housing market gave foreign buyers a genuinely mixed signal today. House prices in Portugal registered a 16.5% year-on-year increase in the second quarter, according to INE, a slowdown from 17.8% in the previous quarter. That's the first real deceleration in a series that had been accelerating for over a year, but 16.5% is still a rate most European housing markets would consider extraordinary for a single year, let alone a slowdown.
At the same time, the volume side of the market kept shrinking. Between April and June 2026, 40,142 homes were sold in Portugal, representing a 6.4% decrease compared to the same quarter of 2025. INE notes this marks the third consecutive quarter of negative year-on-year change in the number of dwellings sold, following -8.7% in Q1 2026 and -4.7% in Q4 2025.
Quarter-on-quarter, though, there was a modest bounce — transactions actually recovered 6.4% compared with the start of 2026. So the annual trend is still down, but the pace of decline is easing off the sharp Q1 drop.
Where the falls — and the gains — are concentrated
The breakdown by dwelling type shows existing homes still dominate the market but are losing ground faster than new builds in volume terms. 32,307 existing homes were sold in Q2 2026, 80.5% of total transactions, down 6.6% from a year earlier, with the transaction value of existing homes reaching €8.1 billion — a 6.1% increase. New homes told a different story: 7,835 new homes were sold (down 5.7%), while the transaction value of new homes reached €2.6 billion, reflecting a 1.6% year-on-year decline.
Geographically, nowhere was immune. Every region recorded a year-on-year drop in the number of homes sold, with the sharpest falls in Madeira (-15.2%) and the Algarve (-12.4%), and the mildest in Alentejo (-0.8%) and the Setúbal Peninsula (-2.1%). Notably, with the exception of the Algarve and Madeira, transaction values kept growing year-on-year in every other region — meaning even where fewer homes changed hands, the ones that did sell went for considerably more.
What this means in euros for a buyer
Here's the number that matters for anyone actually shopping for a home rather than just watching indices: a property that cost €300,000 a year ago, tracking the national 16.5% price rise, would now list closer to €349,500 — an increase of roughly €49,500 in twelve months, or just over €4,100 a month in lost purchasing power for someone who waited. That's GrowIN's own calculation from the INE index, not an official INE figure, but it illustrates why "wait and see" has been an expensive strategy in this market for several years running.
INE itself points to the pressure behind the falling sales numbers. This annual decline in home purchases comes amid greater uncertainty and worsening purchasing power, pressured by rising inflation via energy prices, high house prices, and increased mortgage interest rates.
"A market where sales keep shrinking but prices keep climbing isn't cooling — it's rationing," says GrowIN Portugal Editorial.
The dilemma for foreign buyers
For non-resident buyers, the data cuts both ways. Fewer transactions could eventually mean less competition and more room to negotiate, particularly in the Algarve and Madeira, where sales fell hardest. But a 16.5% annual price rise means anyone who delays a purchase to "let the market settle" risks paying substantially more by the time they act — the slowdown so far has trimmed the rate of increase, not reversed it.
Remember that buying property in Portugal no longer carries any Golden Visa benefit, so the decision now rests purely on lifestyle and investment merits rather than residency incentives. Budget realistically: as a non-resident, expect to pay a flat 7.5% IMT transfer tax on most residential purchases plus 0.8% stamp duty, pushing total buying costs to roughly 8–9% of the purchase price. A NIF and Portuguese bank account are needed before you can even sign a promissory contract (CPCV). Our tax & NIF guide covers the NIF and residency-tax mechanics buyers need sorted before making an offer.
What to watch next
INE's Q3 2026 release, expected in December, will show whether the deceleration in prices continues or whether this quarter was a blip against a still-tight supply of housing stock. Also worth tracking: whether mortgage rates move further, which would squeeze non-resident financing options just as sales volumes are already retreating in the regions foreigners favour most.
For now, the message from Lisbon's statisticians is consistent with what estate agents on the ground have been saying for months — Portugal's housing market is slowing in volume, not in value.