Real residential property prices were 15.2% higher than a year earlier. North Macedonia followed with a 12.5% increase, while Bulgaria recorded growth of 10.8%.

The Portuguese figures come at a time when the global housing market is moving in the opposite direction. Real house prices worldwide fell by 1.2% year-on-year in the first quarter, compared with a 0.5% decline in the final three months of 2025.

The BIS figures are adjusted for inflation, giving a clearer picture of how property prices are changing in real terms. On a nominal basis, before inflation is taken into account, global house prices rose by 1.7%.

Portugal stands out in Europe

Real house prices across advanced economies fell by 0.2% over the year, according to the BIS, while emerging markets recorded a 2% decline.

Some of the world’s larger housing markets saw much sharper falls. Prices dropped by 7% in China and Canada, while the US and UK both recorded declines of 2%.

Europe has generally performed better. Real house prices in the euro area increased by 2.6%, with Spain up 10% and Italy 4%.

Portugal’s increase was therefore well above the European average.

Housing remains under pressure

Portugal’s housing shortage continues to be a major issue, particularly in areas where demand is strongest.

Lisbon, Porto and the Algarve have all experienced substantial pressure from buyers and renters, including international residents. At the same time, the supply of homes has struggled to keep pace with demand.

That pressure is reflected in more recent asking-price figures.

idealista’s latest data put Portugal’s median asking price at €3,207 per square metre at the end of August, 7.5% higher than a year earlier. Prices were almost unchanged from July, suggesting the market may be losing momentum.

The Algarve remains one of the country’s most expensive property markets. Faro recorded an annual increase of 18.3% in August, the biggest rise among Portugal’s district capitals and autonomous-region capitals.

It is worth noting that these figures measure asking prices, while the BIS figures are based on residential property price data. They are not directly comparable, but together they show that prices remain under considerable pressure.

What happens next?

The government is trying to encourage more housebuilding, including a reduction of VAT on qualifying construction to 6% and measures intended to speed up planning and licensing.

Those changes may eventually help increase supply, but they will not produce thousands of new homes overnight. Construction projects take time, particularly in a market where planning, land availability and labour costs can all affect how quickly new properties reach buyers.

For the moment, Portugal remains a striking exception to the wider global housing trend.

While real property prices have fallen across many major economies, Portuguese prices continue to climb. For people trying to buy a home locally, the latest figures offer little sign that affordability pressures are about to disappear.