The London-based Knight Frank report, which analyses 55 housing markets worldwide, reveals that while house prices are still increasing, the global pace of growth has slowed compared to 2023. The average global house price growth for the last 12 months stood at 2.6%, down from 3.9% in 2023, reflecting a cooling trend.

However, Portugal has outperformed the global average by a significant margin, reflecting sustained demand and strong investment appetite despite higher interest rates.

Why are Portugal’s house prices on the rise?

According to Carlos Penalva, founding partner of Quintela + Penalva l Knight Frank, "in the case of Portugal, the drops in interest rates, the great international geopolitical instability, the transfer of financial assets to real assets explain the increase in price and the demand for investment in real estate".

Credits: Supplied Image;

Carlos Penalva also shares that this report allows us to conclude that "we are facing a scenario of strong price growth in most global real estate markets and, in Portugal, in particular. Low product supply, combined with the expected shift to lower interest rates and high demand, should bolster buyer confidence and drive prices higher."

Portugal in the Global Rankings

Among the top-performing housing markets in 2024, Turkey leads the index with an impressive 29.4% growth, followed by Bulgaria (16.3%) and Poland (14.2%). Portugal’s 13.7% price increase places it firmly among Europe’s fastest-growing real estate markets.

At the other end of the spectrum, China and Hong Kong recorded the sharpest declines, with house prices dropping by more than 8% over the past year.

Portugal’s housing market

Looking ahead, the Knight Frank report suggests that further house price growth will depend on the trajectory of interest rate cuts expected in 2025. With demand remaining strong and supply constrained, Portugal is well-positioned to continue attracting real estate investors seeking stability and long-term growth.

Portugal’s real estate market remains a key player on the global stage, reinforcing its reputation as an attractive destination for both local and international buyers.