The new construction sector has been boosting the residential market in Portugal, a trend that has more than doubled the supply of new homes for sale over the last five years, as shown by the most recent data from idealista. However, housing construction still falls short of the country’s needs, which is facing a serious crisis of lack of affordable housing. This is because not only is the supply of new homes quickly absorbed by high demand, but it also tends to come with higher prices, putting it out of reach for many families.
New homes for sale much more expensive than used ones
Sales of new homes grow again and absorb supply
New homes reach the highest licensing pace in 5 years
“In 2025, new construction maintained a significant weight in the dynamics of the housing market in Portugal,” highlights idealista’s annual report on the Portuguese residential market for last year. The data show that the supply of new homes available for sale reached almost 21,000 units in the last quarter of 2025, more than double the stock recorded five years earlier.
But where are these properties located? “New construction activity is mainly concentrated in the country’s main urban and tourist markets,” the document also states. Lisbon and Porto represent almost 75% of the supply of new homes for sale among the major Portuguese cities, followed by Funchal (5.9%), Braga (3%), Faro (2.9%) and Setúbal (2.9%). In large inland cities such as Portalegre, Vila Real or Guarda, this supply has a much smaller weight.
New homes for sale in Portugal
Number of new apartments for sale on idealista at the end of each month
Chart: idealista/news
Source: Residential Market Report – Portugal 2025
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New homes for sale much more expensive than used ones
Although the stock of new housing is dynamic, the truth is that new homes for sale tend to be much more expensive than existing ones, putting them out of reach for many families. Data from the National Statistics Institute (INE), relating to the summer of 2025 and included in this analysis, reveal that new homes were sold at a final average price 40% higher than that of existing homes.
These high final prices reflect a market where new homes for sale are advertised at higher prices. “The average unit value recorded nationwide during the last quarter of 2025 stood at 4,165 euros per square metre (euros/m²),” reveals the idealista analysis.
Geographically, four major cities exceeded the national average price of new homes for sale: Lisbon (7,574 euros/m²), Funchal (4,833 euros/m²), Porto (4,236 euros/m²) and Setúbal (4,198 euros/m²). Meanwhile, the cities with the most affordable new homes for sale are Guarda (1,737 euros/m²) and Portalegre (1,436 euros/m²).
The high price of new homes advertised on the national market can be explained by a combination of multiple factors that have created a “perfect storm” in this regard. Today, builders and real estate developers face rising construction costs (due to labour shortages), high costs of urban land, lengthy and expensive licensing procedures, as well as high taxes, among other factors.
It is precisely to try to address some of these issues that the government led by Montenegro presented the housing tax package, which will reduce VAT from 23% to 6% on the construction of new homes for sale up to 660,000 euros (a moderate value already updated this year). The government also aims to streamline urban planning licensing through another legal measure. These legislative proposals have already passed through the parliamentary committee but have not yet come into force.
New homes for sale: supply and prices by major cities
Distribution of new homes by district capitals (%)
Median value in December 2025 (euros/m²)
District capital — Units — Price (euros/m²)
Lisbon — 39.4% — 7,574
Porto — 35.0% — 4,236
Funchal — 5.9% — 4,833
Braga — 3.0% — 2,914
Faro — 2.9% — 3,836
Setúbal — 2.7% — 4,198
Viana do Castelo — 2.5% — 3,651
Coimbra — 2.4% — 3,627
Aveiro — 2.0% — 3,423
Leiria — 1.6% — 2,717
Santarém — 0.6% — 2,393
Ponta Delgada — 0.6% — 3,803
Viseu — 0.4% — 2,545
Castelo Branco — 0.3% — 2,008
Bragança — 0.2% — 2,950
Guarda — 0.2% — 1,737
Vila Real — 0.2% — 2,525
Portalegre — 0.0% — 1,436
Table: idealista/news
Source: Residential Market Report – Portugal 2025
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Sales of new homes grow again and absorb supply
Another major issue is that the supply of newly built housing is quickly absorbed by the high pace of new home sales, in a market context supported by a robust labour market, higher savings and available income, accessible mortgage interest rates, and support measures for young buyers purchasing their first home (IMT exemption and public guarantee).
Up to the third quarter of 2025, almost 25,000 new homes were sold in Portugal, representing about 20% of the total transactions of family dwellings, according to data from INE included in the report. This is the highest number of transactions of new homes since at least 2020.
The North region concentrated the largest share of new home sales in the country (37% of the total). It is followed by the Centre region (16.3%) and Greater Lisbon (15.9%). The Autonomous Region of the Azores stands out for having recorded the lowest number of new residential sales (1.2% of the total).
Considering the total of 126,728 transactions of family dwellings in Portugal, both new and existing properties, “there is a strong regional concentration, with 49% of transactions taking place in the North (30%) and Greater Lisbon (19%). This is followed by the Centre region (16%), the Setúbal Peninsula (10%), Oeste and Vale do Tejo (9%), Algarve (7%), Alentejo (5%), and the autonomous regions of Madeira and the Azores, both with 2%,” the report states.
Sales of new homes in Portugal
Data between the 1st and 3rd quarter of each year
2020 — 17,763
2021 — 19,882
2022 — 23,064
2023 — 21,407
2024 — 22,762
2025 — 24,942
Source: INE
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New homes reach the highest licensing pace in 5 years
The housing access crisis can only be solved with more homes on the market (both new and existing) to meet demand and, consequently, to ease property prices, which are rising at the fastest pace ever. This is precisely what the government intends by providing a series of incentives to the construction and real estate sector through its tax package.
For now, there are positive signs on the construction side. “With regard to the licensing of new constructions for family housing, the number of licensed dwellings in 2025, up to the month of November, is approaching 39,000 units, representing the highest licensing pace of the last five years,” reveal the INE data cited in the report.
The composition of future residential supply shows “a clear predominance of medium-sized typologies, with almost 70% of the dwellings expected to enter the market in the coming months and years corresponding to homes with two or three bedrooms,” the report also concludes.
It is precisely in the North — where more new homes are sold — that more housing will be built, concentrating more than 45% of the total licences granted in the entire country (equivalent to 17,640 licensed dwellings). This is followed by the Centre region (6,368) and Greater Lisbon (5,984). At the bottom of the table are the Azores (714), where fewer new homes are also sold.
Although the signs in housing licensing are positive for now, it has already become public that some real estate developers are putting residential projects on “stand-by”, awaiting clarification on the practical application of the 6% VAT in construction. This scenario may slow the pace of housing licensing in Portugal.
Homes licensed per year
Number of dwellings licensed each year
2025 data up to November
2021 — 29,827
2022 — 30,669
2023 — 32,519
2024 — 34,637
2025 — 38,972
Source: INE
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