The second-largest city in Portugal has remained relatively under the radar for international buyers and thus retains a comparatively higher level of affordability. Not to be underestimated, Porto supports a robust prime residential market despite its smaller size relative to Lisbon.

Costs for all types of prime property have been steadily rising, with the largest annual increases occurring slightly earlier than the rest of Portugal. While most Portuguese markets saw the largest growth in 2019, Porto saw the highest capital value and rental growth between 2016 and 2018, at an average growth per annum of 20.2% over that period.

Compared to the national average growth in 2023 of 5.3% for prime residential capital values, the Porto market has continued to outpace the rest of our monitored markets, recording growth of 15.6%. A deeper look into the market reveals a profile of supply mostly geared towards higher-income families, similar to Lisbon. Only 30% of the current supply has average asking prices that range from €169,000 to €250,000. The remaining 70% of stock exceeds half a million euros per unit.

While Porto does remain a predominantly domestic market, approximately 40% of new buyers are international. Buyers from North America, Brazil, and Israel make up the largest international buyer segments. There are also increasing numbers of young families moving to Porto, attracted by the quality of life in the city. The high calibre of international schooling is also a key factor for new residents to the city. Rental prices in the city have seen an even sharper rise, with an average 24.8% annual growth in 2023. The average rental values for one-bedroom apartments in the city centre are €1,159 per month for new units and €978 per month for older ones.

Although Porto saw a decrease in the number of sales last year, capital values and rents have continued to rise, signalling that Porto remains an attractive option for second-home purchasers. It has additional appeal to more cost-conscious international buyers who do not want to compromise on a modern European city location.

_{Read the articles within Savills Spotlight on Portugal report below}