According to Paulo Macedo, CEO of Portuguese bank Caixa Geral de Depósitos (CGD), housing prices in Portugal are set to rise further in 2025, with demand vastly outpacing supply.

Speaking at the 'Encontro Fora da Caixa' conference in Faro, Macedo explained that this ongoing price surge is primarily due to an "insufficient supply" and an "increase in demand" without adequate production capacity for affordable housing.

While Portugal’s overall economic outlook is positive, with the economy projected to grow around 3% and inflation expected to fall, these factors won’t significantly ease housing shortages.

Increased disposable income and reduced interest rates should support borrowing and investment, says Macedo, but he warns of short-term risks, with limited property supply remaining a challenge.

For the banking sector, the bank CEO also predicted record profits for 2024, but a decline in profit margins in 2025 as economic conditions evolve. “The banking sector will have a good year, but with the drop in margins, profits will decline in 2025,” he noted.

Despite rising property prices, there are still promising opportunities for buyers, especially in the Algarve, as well as tax breaks for overseas investors.

With expert guidance from an expert local estate agent, such as Algarve Home Sales, prospective homeowners can still find desirable properties even in a competitive market. Contact us for a chat!