Numbers are pulled from public data as of mid-2025. Treat them as a guide, not gospel.
Lisbon Real Estate Outlook — Where to Put Your Money in 2025
Lisbon’s property ride hasn’t hit the brakes. Median asking prices hover at € 5,720 /m² —triple the 2014 ticket—while pockets of the city still spit out 5–7 % gross yields. Toss in a stubborn housing crunch, a flood of remote-working talent and rehab tax breaks that slash build costs, and you’re staring at returns few Western European capitals can match.
Guide Navigation
1. Market Snapshot (2024–25)
| Metric | Latest Reading | Source |
|---|---|---|
| Median asking price | € 5,720 /m² (city-wide) | Idealista |
| Prime gross yields | 5–7 % (Graça, Alcântara) | Confidencial Imobiliário |
| Office take-up, 2024 YoY | +120 % occupancy | Cushman & Wakefield |
| Short-let (AL) licence trend | New licences frozen in key parishes | RentalScaleUp |
2. Residential Opportunities
Supply trains can’t keep up. Ten years of tourism boom, tech-visa arrivals and a migrant population that has doubled since 2018 have gutted vacancy levels. Core neighbourhoods sit below 1 % even after endless rent-cap debates. Feel squeezed yet?
Renovation fodder everywhere. Pre-1960 blocks crowd Alfama, Mouraria and Alcântara. Many score reduced 6 % VAT on works plus an IMT waiver at purchase—so long as you commit to a rehab within three years. Typical make-over budgets fall between € 700 and € 1,100 /m², while finished units often clear € 5,000 /m². That margin? Not shabby.
Hot yield pockets:
• Marvila
— ex-warehouses hugging the shiny river-tech strip; advertised rents back 5 %+.
• Graça & Penha
— hilltop T2s under 80 m² trade around € 4,100 /m²; mid-term lets punch out 4–5 %.
• Ajuda
— uni spill-over, micro-units below € 3,800 /m², roughly 6 % if you rent by the room.
Side whisper: Azulejo Capital LLC has been snapping up value-add walk-ups in Marvila. When professional cash moves first, pay attention.
3. Commercial Bright-Spots
- Office comeback: Post-pandemic take-up leapt 120 % in 2024 as multinationals planted shared-service hubs. Class-A vacancy: 6 %.
- Last-mile logistics: Land inside the A36 ring is scarce and pricey, keeping prime yields near 5.2 %—better than comparable Iberian nodes.
- Hospitality conversions: A record 34 million airport arrivals in 2024 have boutique hotels in Baixa pre-letting at ADRs north of € 150.
4. Rehabilitation & Tax Incentives
- IMT waiver: Skip transfer tax if the property is certified for rehab within three years.
- 6 % VAT: Applies to rehab work on homes inside Urban Rehabilitation Areas (ARUs).
- IRS rental breaks: Lock in a lease of 5+ years and claw back 2–5 percentage points of personal income tax on net rent.
- Municipal sweeteners: Some parishes chip in grant money for seismic upgrades and façade fixes.
5. Risk & ROI Benchmarks
A renovated T2 in Graça bought at € 4,100 /m² and rented for € 18 /m² lands roughly 4.9 % gross. With 60 % LTV debt (Euribor + 1.9 %), cash-on-cash edges into the 7–8 % range. Marvila loft shells picked up around € 2,600 /m² and stabilised at € 5,100 /m² have kicked out low-teens IRRs, assuming you keep build costs on a leash.
Big-ticket risks? (i) Zero new AL licences in heritage zones, (ii) rate whiplash on floating loans, and (iii) sluggish exits above the € 1 million mark—average time to sell is pushing seven months.
