Portugal Leads Europe's Housing Boom with 16.5% Price Surge

House prices continue to rise across much of Europe, but at varying rates. In Portugal and Bulgaria, double-digit annual increases were recorded in the second quarter of 2026, with Portugal seeing a 16.5% year-on-year increase. This is attributed to strong housing demand outstripping supply, particularly in Lisbon, Porto, and coastal areas.

Mikk Kalmet, an expert at Global Property Guide, notes that limited new construction, foreign investment, tourism-related demand, and persistent housing shortages have all contributed to rising prices in Portugal. In Bulgaria, rising household incomes, wage growth, relatively affordable mortgage financing, and strong demand for property as an investment have supported price increases.

The EU as a whole saw house prices rise by 4.7% compared to the previous year, outpacing inflation of 3.2%. Among the nine countries with double-digit annual increases, Lithuania recorded a 14.3%, Slovakia a 13.6%, and Croatia a 12.7%.

Finland, Luxembourg, and France were the only countries where house prices declined year on year over this period, with Finland seeing a decline of 2.7%. Kalmet attributed these declines to weak economic growth in Finland, subdued consumer confidence, and lingering effects of higher interest rates.