Skyrocketing residential property costs place Algarve homes over €500,000 mark.

The Lowdown on Real Estate Trends in Southern Portugal

Got the latest scoop on the property market in the Southern region of mainland Portugal? Yeah, let's dive right in! Imovirtual has spilled the beans on how the average rental and sale prices have shifted in each district, comparing April 2025, March 2025, and April 2024.

Nationwide

The prices to buy a house in Portugal average around €397,000, marking a jump of 20% compared to last year (€332 thousand) and a monthly bump of 2% (€390 thousand in March). What about the South? The average sales value zooms to €250 thousand, an annual increase of 22% (€205 thousand to €240 thousand in April 2024) and a monthly growth of 4% (€240 thousand in March).

here's a quick rundown of the districts:

Évora clocked a monthly increase of 4%, reaching €250,000, equivalent to an annual hike of 22%.
Portalegre, the most accessible district, stood steady at €122,000, with an annual appreciation of 28% (€95,000) and 2% monthly.
Beja experienced a 5% increase in the last month (€170,000 to €179,000) and a yearly leap of 21%.
Setúbal inched up 1% to €430,000, consolidating annual growth of 23% (€350,000).
Faro, with the steepest prices, hit €525,000, with a monthly increase of 5% and an annual bump of 22%.

Rental Side

On the rental scene, the national average reached €1,300, signifying an annual growth of 8% and a monthly growth of 4%. The South averaged €850, showing an annual increase of 6% (€805 to €850 in April 2024) and a monthly dip of -6% (compared to €900 in March).

District-wise:

Faro recorded the highest annual increase in the country: +61% (from €805 to €1,300) and a monthly appreciation of 4%.
Setúbal held steady at €1,200, boasting annual growth of 4% and monthly consistency.
Évora dipped -6% in the month (from €900 to €850), still sporting an annual increase of 6%.
Portalegre shot up 8% in the month, reaching €500, and has amassed an annual appreciation of 20%.
Beja, after a string of declines, rocketed +16% in April (from €647.50 to €750), although it’s still showing an annual fall of -17%.

But wait, there’s more! According to recent trends, the Algarve (Faro District) is nursing some seriously high prices. It's one of the top five most expensive property markets in Portugal, with house prices continuing to climb[5]. Across Portugal, house prices have surged, particularly in Q4 2024 versus the same period in 2023, reflecting robust demand and market resilience[2][5]. The thriving rental market in Portugal, driven by expat demand and tighter mortgage conditions, has resulted in increased rental yields, especially in tourist areas like the Algarve[3]. Unfortunately, district-by-district rental price comparisons for April 2024 and March 2025 aren't readily available. However, it's likely rental prices have climbed due to higher demand and tight supply in popular areas.

Sources:1. Imovirtual – Latest property trends in southern Portugal2. Statista – Average house prices in Portugal – 2011 to 20243. Forbes Advisor – Renting in Portugal: Pros, Cons, and Costs4. Giant Finance – How much does it cost to buy a house in Portugal?5. Ideal Homes - Property Market in Portugal, Algarve hotspots

In the realm of real estate trends in Southern Portugal, the bustling Algarve district, particularly Faro, has witnessed the highest annual increase among rental prices (+61%) and is marked as one of the top five most expensive property markets in the nation, attributable to persistent demand and market resilience. Simultaneously, the thriving rental market, fueled by expat demand and stricter mortgage conditions, has spurred increased returns for investors engaging in the property sector throughout Portugal, notably in districts such as the Algarve.

Considering the climate of finance, potential investors focusing on the Portuguese housing market should undoubtedly look into the upward trend in southern districts, with Faro showcasing significant promise for both capital appreciation and investment incomes. Consequently, the demand for real estate in Southern Portugal, specifically in regions like the Algarve, looks poised for further development in the months and years ahead.