Real-Estate Prices Expected to Keep Climbing in 2025

Limited Supply But Strong Demand Drive Prices

Housing prices in Portugal are likely to continue rising in 2025, with demand outpacing supply. Paulo Macedo, CEO of Caixa Geral de Depósitos (CGD), explained that a limited supply of affordable homes, combined with strong demand, will drive prices higher. Macedo shared this outlook at the “Encontro Fora da Caixa” conference in Faro, where leaders discussed sustainable resource management and its impact on Portugal’s future.

The Market Lacks Affordable Housing

The gap between housing supply and demand is pushing prices up. Macedo noted that the market lacks affordable housing and that developers aren’t able to produce new homes quickly enough to meet the demand. This imbalance, he said, will likely keep prices high for the foreseeable future.

Moderate Economic Growth Expected

CGD forecasts Portugal’s economy will grow by about 3% in 2025, helped by increased consumer spending and funds from Portugal’s Recovery and Resilience Plan (PRR). Though positive, Macedo noted that this growth may not reach some economists’ expectations and comes with risks that could impact the short-term outlook.

Higher Disposable Income and Access to Credit

In 2025, individuals are expected to:

• rising wages

• lower taxes

• reduced interest rates.

This financial boost may lead to greater access to credit, including home loans, creating even higher demand. In every scenario, high prices could still make it difficult for many to buy homes, despite this increased borrowing power.

Banking Profits Set to Dip Next Year

After a strong 2024, CGD expects banking profits to drop in 2025 due to tighter interest margins.

Source: Diário de Notícias da Madeira