Fitch predicts continued rise in Portugal’s housing prices

Published on 19th March, 2026

House prices in Portugal are expected to continue climbing, with one of the top three credit rating agencies Fitch Ratings, forecasting a further 15% increase in 2026 following a record 18% rise in 2025. The agency says the upward trend shows little sign of reversing, driven by strong demand and a persistent shortage of housing supply.

Speaking during a webinar on Portugal’s economic outlook, Juan Garcia, Senior Director of Structured Finance and Securities Ratings at Fitch, said the agency does not anticipate a short-term decline in property prices. According to Garcia, the market continues to be supported by high demand from both Portuguese buyers and international investors.

“Demand remains strong from nationals and foreign buyers alike, whether from Europe or other regions,” he said, adding that limited housing supply is continuing to put upward pressure on prices.

However, the rapid rise in property values is creating growing challenges for those seeking to enter the housing market. Garcia noted that nominal house price growth is significantly outpacing wage increases, making affordability an increasingly pressing issue for many households.

“In this scenario, we do not see a reversal in house prices in the short term,” he explained, highlighting that structural supply constraints remain a key factor influencing the market.

During the webinar, analysts were also asked whether rising property prices and mortgage lending could present risks to the banking sector. Julien Grandjean, Director of Bank Ratings at Fitch, said there were currently no signs of major concerns for Portuguese banks.

Grandjean emphasised that the country’s regulatory framework provides safeguards. Lending rules imposed by the Bank of Portugal require banks to follow strict criteria when granting mortgages, adding what he described as “an additional layer of prudence” to the system.

He also noted that mortgage products have evolved in recent years, with a growing share of loans now issued with fixed or mixed interest rates. This shift, he said, helps provide greater stability for borrowers and lenders alike.

Despite affordability concerns, Fitch expects Portugal’s property market to remain resilient, underpinned by continued demand and constrained housing supply in the coming years.

To find out more about investing in a home in Portugal, contact our team of knowledgeable and professional Property Advisors.

Published in: News and Updates / Portugal Property / Property for sale in Portugal