Portugal's housing debate often focuses on foreign buyers. New official first-quarter data suggest another part of the market deserves at least as much attention: institutional and corporate investors, whose prices are rising faster than what Portuguese families pay.

The record, and the two-speed market underneath it

The median sale price for homes hit €2,337 per square metre in the first quarter, according to INE, up 19.8% from a year earlier and 6.3% from the previous quarter alone. At the same time, the number of transactions fell 10.5% to 35,953 homes, a sign that fewer buyers can keep pace with the climb. Beneath that national average, INE's data splits buyers into categories, and the gaps between them are widening.

What foreign buyers actually pay

Buyers with a tax domicile outside Portugal paid a median €3,000 per square metre in the first quarter, against €2,313 for Portugal-domiciled buyers, a 29.7% premium nationally. That gap widens sharply by region: 34.5% in Greater Lisbon (€5,118 vs. €3,805), 24.5% in the Algarve (€4,003 vs. €3,214), and 16.9% in Greater Porto (€2,960 vs. €2,533).

Foreign buyers' overall share of the market has stayed fairly steady rather than exploding: Banco de Portugal's Financial Stability Report puts it at 28% of purchases in 2025, close to the 25% recorded in 2019 and down from a peak of 31% in 2023. Brazil, Angola, and France are the leading countries of origin. A narrower INE measure, counting only buyers with a foreign tax domicile, rather than foreign nationality broadly, has actually fallen for three straight years, to 8,471 homes in 2025; the two figures are simply counting different things.

Investment funds are moving faster

The strongest acceleration appears in this category. INE groups these buyers as "restantes sectores institucionais", financial and non-financial companies, which includes investment funds, and in the first quarter they paid a median €2,142 per square metre, up 33.8% from a year earlier. Families, by comparison, paid €2,364 per square metre, up 19% over the same period. Institutional buyers are seeing prices rise at nearly twice the annual rate recorded for families. Foreign buyers, by contrast, continue to pay higher prices overall than Portugal-based buyers.

The gap between what institutional buyers and families pay is widest in Lezíria do Tejo, where institutional buyers paid €816 more per square metre than families, an 81.6% premium, the largest in the country. Greater Lisbon and the Algarve show the same pattern at a smaller scale (institutional buyers there paid €3,896 and €3,372 per square metre, respectively). The Azores and the Leiria region are the only two parts of the country where the pattern reverses, with families paying more than institutional buyers.

Why the supply side keeps pushing prices up

Part of the story is what's actually getting built. Portugal licensed 48,844 new dwellings in 2025, up 14.6% and the highest figure since 2011, but licensing for rehabilitation work on existing buildings fell 0.9%, shrinking its share of total construction from 22% in 2020 to under 20% last year. New-build homes also carry a steep premium over existing ones: in Lisbon municipality, new homes sold for €6,226 per square metre against €4,896 for existing stock, the widest gap in the country. The country's construction pipeline, in other words, keeps concentrating supply in the pricier segment rather than adding cheaper existing-home inventory back into the market.

What this looks like on the ground

The averages hide a lot of local variation. A widely covered new tower under construction on Porto's Avenida Fernão de Magalhães sold half its available units to foreign buyers, but a separate market-wide study put foreign buyers at just 16% of Porto's residential market overall, a reminder that one high-profile development can look nothing like the city around it. Foreign buyer interest also appears to be spreading beyond the traditional hotspots: portal search data from Imovirtual show Porto overtaking Lisbon as the most-searched Portuguese city among foreign users in 2026, with Braga, Aveiro, and Viana do Castelo all gaining ground too, though that's a measure of search interest, not completed purchases, and the two don't always move together.

Taken together, the data point to a housing market where both foreign individual buyers and institutional investors are paying more than ordinary household buyers, with the institutional segment currently showing the fastest price growth.