Although during the 2008 economic crisis, the Portuguese real estate market was hit hard, today, buying property in Portugal won’t only provide you with a home but arguably a sound investment.

The real estate market has been growing in value all around the country. Unfortunately, it is getting harder for locals to afford to own their own homes, particularly young people. 

If you are coming from another country, buying a home could potentially even land you permanent residence or even citizenship if you are eligible to apply for a Portugal Golden Visa!

However, if you have never visited Portugal or do not have knowledge of the property market, figuring out where to buy can be a struggle. To help you out, we have selected the 5 best places to buy a house in Portugal.

Lisbon and Porto are not the only options, and in fact, these are expensive places that no longer qualify for the Golden Visa. Our top picks are mostly affordable and offer you an incredible quality of life. 

But first, let’s take a look at the pros and cons of buying a house in Portugal so that you can make the right decision.

Guide to Estate in Portugal: Buying a House in Portugal  

Pros and Cons of Buying a House in Portugal

Pros

• Become eligible for a Portugal Golden Visa and obtain citizenship after 6 years (Property in Porto, Lisbon, and Algarve no longer apply)
• Solid investment, Portugal has excellent rental potential
• Affordable cost of living (outside large cities)
• 300+ days of sun and moderate weather
•  In 2019, Global Finance magazine ranked Portugal fourth amongst the safest countries in the world.
• High-quality education and healthcare services

Cons

• No central heating in most houses in Portugal
• Bureaucracy, process might take longer than expected

Top 5 Places to Buy a House in Portugal

1. Leiria

As of July 2022, buying property in Leiria costs an average of 1.384 €/m2. This isn’t the lowest price out there, but it is still extremely affordable. A 120 m2 house would cost an average of less than €170,000. 

Leiria is located in central Portugal and has not yet been overrun by tourists. Getting a well-paying job here is difficult and the commute to Lisbon or Porto would be too long.

However, this small city of less than 150,000 is perfect if you can work remotely or even better, are looking to retire. 

The city has great train connections to the rest of the country for travel and is incredibly affordable. It also features outstanding beaches, rivers, forests, and ancient architecture. 

Guide to Leiria

2. Beja

If you’re looking for extremely affordable property, a home in Beja goes for an average of 849 €/m2. A 120 m2 home cost you a little over €100,000. 

Beja is located in the region of Alentejo and has a population of under 50,000 people. Sitting on a 900 feet hill, Beja offers gorgeous views of the Baixo Alentejo. From Roman ruins to medieval castles, this city provides a quiet escape from the stresses of everyday life.

Again, its affordability is connected to its remoteness and the fact that it is located more in the interior of the country. Due to its location in southern Portugal, temperatures tend to be a lot warmer than in the rest of the country. 

However, Beja is only a 1.30 hour drive from Algarve, a region with some of the best beaches in the country. 

Guide to Beja

3. Setubal

Want a quiet life but still want to be close to the Portuguese capital? Then you will need to pay a bit more! As of July 2022, a house in Setubal costs 2.173 €/m2. A 120 m2 house costs around €260,000. 

A 40-minute drive from Lisbon, Setubal offers you the opportunity of working in Lisbon and living in a relaxing area with some of the beach beaches in the country.

Located on the northern bank of the Sado River estuary, Setubal is also connected to the nearby coast of the Arrabida hills natural park. Living here, you can enjoy hikes in the natural park’s astonishing nature and spot some dolphins at the beach.

You can also get a ferry to the Troia peninsula from Setubal, a well-known spot for quiet beaches with clear water. 

4. Pico

The Azores archipelago housing market has been growing in recent years but remains affordable. A house on the island of Pico costs an average of 1.028 €/m2 as of July 2022, meaning a 120 m2 house costs around €120,000.

Pico is the second-largest island in the Azores and home to Portugal’s highest mountain at 2,000 meters high. Pico is known as the Hawaii of Portugal and is covered with exotic vegetation and beautiful dark blue sea views. It also features black volcanic soils and UNESCO-designated vineyards.

Pico is perfect for those wanting to live a slow-paced life, surrounded by nature and natural beaches. If you are looking to buy to invest in a tourism property like Airbnb, Pico is also a great spot. While its year-round population is small, thousands travel yearly to the island. 

Guide to Pico

5. Porto

If you’re okay with spending a lot more money for a more cosmopolitan life, Porto is an amazing option. While many expats flock to Lisbon, Porto is not second best. And it is a lot more affordable!

A home in Porto costs an average of 2.341 €/m2, making a 120 m2 cost around €280,000. In Lisbon, a house that size would cost you an average of €400,000. 

Porto is home to a large international community with a wider range of jobs available than less popular places. The city lies along the beautiful Douro river and features unique architecture, street art, as well as exceptional food and wine.

Guide to Porto

Although the positives outweigh the negatives, living in Portugal is not perfect. While many travel bloggers out there only highlight the pros of living in Portugal, this does not reflect the whole reality. The thought of 300+ days of sun and incredible food might have made you forget to consider the downsides of moving to Portugal. 

Whenever making such a life-changing decision, it is vital to consider the possible struggles you might face in a new country. Luckily, we have selected our top 9 downsides to living in Portugal to help you prepare accordingly. 

1. Low wages in Portugal

A major downside to living in Portugal is finding a well-paying job. Whether you are making minimum wage or the average salary, do not expect to make a lot of money.

In 2022, the national minimum salary in Portugal is €705 a month before tax. This value refers to 14 salaries, including the two extra payments on Christmas and summer. If you look at 12 salaries, it amounts to €822.50. 

If you receive the minimum salary, after paying income tax, you receive around €630. Those working in restaurants, hotels, stores, cleaning, and more tend to receive the minimum wage. 

Although Portugal has a relatively low cost of living, this salary makes it impossible to rent an apartment in cities such as Lisbon and Porto and live comfortably.

According to the National Statistics Institute, the average gross monthly salary is €1,361. As Portugal has progressive tax, those receiving the average salary will pay more. After paying income tax and social security, you will be left with €960.

However, if you are getting a top-level job, you can still make very good money. The best salaries are given to top management positions in Lisbon. For example, a general manager can make between €110,000 and €170,000. 

Expat Guide to Working in Portugal

2. Slow public transport in Portugal

Don’t get me wrong – Portugal has recently improved in this space in the last five years. However, if you have lived in places like the Netherlands and the United Kingdom, don’t expect the same quality.

While major cities like Lisbon and Porto have a more modern subway and tram system, many others only rely on bus routes. These often only come in long intervals and arrive late. If you live in the interior of the country, waiting for an hour for the bus is commonplace. 

Unfortunately, you might also be shocked that a lot of information is unavailable online. In many cities, you can’t purchase tickets online or check schedules in English. Always make sure to carry cash with you as the bus driver might not accept an ATM card.

While many argue transport is cheap in Portugal, this is not always the case. For example, in Cascais and Sintering, buses tend to be a lot more expensive with 15-minute one-way rides costing almost €3 sometimes. 

3. Competitive Portuguese housing market

Property prices in Portugal have been rising since 2014, with many areas seeing a 10% rise between 2020 and 2021.

According to Bloomberg, the increase in property prices can be attributed to strong demand and a housing shortage. This is true, particularly in Lisbon, where there is a high demand from both local and international investors.

Due to high demand and a housing shortage, houses are more expensive today. This can make it difficult to purchase a home in Portugal’s competitive housing market. Getting a mortgage could be tough if you are on minimum or even the average wage.

While negotiation is always on the table in the Portuguese housing market, the margin for negotiation is becoming smaller.

Expats often overpay for real estate in Portugal – driving prices further up. If you are looking to buy in Portugal, you must do some market research to establish whether the price is fair. Don’t compare the house prices in Portugal to your country of origin and argue they are affordable.

However, this downside is also an upside for those with capital looking to invest. The strong growth of the housing market means that investors are prone to getting a safe return on their investment in the long term. 

International Guide to Real Estate in Portugal: Buying a House in Portugal

4. Shady landlords: Lack of rental contracts in Portugal

Just because something is illegal does not mean it’s not socially acceptable in Portugal. Unfortunately, many locals and expats get tricked into not signing an official rental contract.

Landlords do this because they do not want to declare their rental income with the tax authorities. Without a contract, they do not need to pay tax for non-tourism properties, which is set at 28%. The tenant will usually also get a nice discount on the property.

It might seem like a win-win situation initially, but trust us, the extra money is not worth it.

Without a rental contract, tenants are left with no legal protection against rent increases and will technically waver their tenant rights (although this is not always the case legally). It’s also especially bad for foreigners who need a rental contract for their residency permit.

Guide to Renting an Apartment in Lisbon

5. Portuguese bureaucracy and long waiting times

The Portuguese slow pace of life is not always rainbows and sunshine. With this relaxed mindset comes bureaucracy and long waiting times. If you have ever been in contact with SEF for a visa, we don’t need to remind you.

Especially in public services, it can take a while to get things done. If you are at an SNS health center, expect to wait a few hours to be treated. Waiting for an important document such as a driving license? It will arrive when it arrives – the Portuguese way of thinking.

Even if you are taking care of a simple task, expect to have to fill out useless forms and having to call various entities. Bureaucracy is a part of Portuguese society, although it is also present in other European countries like Spain.

6. No AC in Portuguese houses

If you’re an American moving to Portugal in the summer, time to purchase some fans. Most houses do not come equipped with air conditioning. Only 7.9% of homes nationwide have AC.

Temperatures can get quite high, particularly during the recent heat waves they reached over 40 degrees Celsius.

However, homes in Southern Portugal have the most AC units. 13.2% of homes in the Algarve have air-con, followed by Lisbon and Braga. 

While more common than AC, many houses in Portugal do not come with central heating, particularly older homes. You will have to add heating yourself, which can be very expensive depending on the size of your home. 

7. Toxic work culture in Portugal

Point #7 is debatable and depends on your country of origin. Too many Portuguese, the work culture is just fine. However, for those coming from countries like Finland and the Netherlands, the work culture is beyond toxic and unhealthy.

This might come as a shock as Portugal has been celebrated in the media for its incredible labor laws. Unfortunately, these are not always enforced.

Although companies are oftentimes lenient with punctuality, employees tend to work long hours. Despite a maximum 40-hour work week, it is many times expected that employees work longer hours. Many only arrive home after 7 PM or later, losing time with their families.

In fact, Portugal is the top European country where employees are experiencing the most burnout, with Greece and Latvia coming next.

Employees work more hours compared to other European countries, and the percentage of reporting risk factors affecting mental well-being at work is 38.6%.

Portugal’s Not So Perfect Labor Laws and Workers’ Rights

8. Learning Portuguese

One thing is if you are relocating for a year or two, but if you are planning a long-term move to Portugal, learning the language is essential. While in Lisbon and Porto you will be able to navigate everyday life in English, this isn’t the case everywhere else. 

You’ll have a hard time outside the main cities if you don’t speak Portuguese. Even if you live in Lisbon and Porto, you could get charged more for certain products if you only speak English, even though this is illegal. 

Portuguese is complex. As a highly gendered language with difficult verbs to memorize, you must put in the time and effort. 

Although Portuguese is a hard language to learn, it will be useful even if you move away. Over 215 million people speak Portuguese worldwide, making it the 6th most spoken language. 

9. Expensive phone data in Portugal

Portugal is known for its relatively low cost of living. However, this isn’t the case for all products and services. If you’re used to enjoying unlimited phone data for a cheap price tag, you won’t find this in Portugal.

Most people opt for limited data packages due to the high cost. 1GB will cost you around €10 which, let’s be honest, isn’t enough if your favorite pastime is scrolling through TikTok.

An unlimited data package could cost you anywhere between €30 and €40 a month. This is quite high in comparison to other European countries like the Netherlands where it would only cost you around €20. 

Faro is located in the Algarve region in southern Portugal and is home to a vibrant expat community. Known for its year-round sunny weather, Faro has some of the warmest weather in the country and the best beaches in Portugal. 

But is it expensive to live in Faro? Portugal has a lower cost of living than major European countries such as the Netherlands, Italy, and France.

Although Faro is not the cheapest city in Portugal, it is more affordable than the capital Lisbon. Rent is around 20% cheaper, and day-to-day costs such as restaurant prices are also more affordable than in Lisbon.

If you’re considering Faro as a permanent or temporary home, let’s take a look at the average monthly budget for expats without children, families, and digital nomads.

Guide to Faro

Cost of Living in Faro for an Expat 

The monthly budget for an expat in Faro is less than €1400.

A one-bedroom apartment costs around €750. However, you can save here by renting a room for less than €400.

A monthly transportation pass is around €50 or less for buses. You can also get a train to many cities from Faro, such as Lisbon and Porto. 

Utilities cost around €150, including phone data and cable TV.

For exploring Faro, eating out at your favorite restaurants, and exploring the nightlife, budget around €200 a month. You can easily spend less or more, depending on your lifestyle. 

Groceries for a single person average out at around €50 a week.

Health care could add to your monthly budget in Faro. EU citizens with a valid European Health Insurance Card can use the National Health Service (SNS) for free for up to 90 days in Portugal. This allows them time to get registered as legal residents to continue using the public health system.

However, non-EU citizens are only entitled to use the public health system if they are employed and pay social security in Portugal, having to be registered as legal residents as well.

Even if this is the case, they must purchase private health insurance to cover medical care before arriving in Portugal and becoming a legal resident.

Cost of Living in Faro for a Digital Nomad

The cost of living in Faro for a digital nomad is at least €1000 a month.

If you are looking to stay at a private Airbnb, this could almost triple your budget as it will cost anywhere between €1500 and €2000 a month.

A shared room in a hostel starts at around €15 a night, and a private room is around €40 a night. 

Renting a desk at a co-working place in Faro can cost between €100 to €250 a month. Transportation costs around €50. There are plenty of buses in the city and a train station connecting you to other main Portuguese cities.

Budget at least €200 for leisure such as eating out, nightlife, and trips to nearby beaches and attractions.

If you are looking for a full tourist experience and looking at tours, you will need more than this for the month.

Food can easily max out your monthly budget. If you want to save and have a kitchen at your disposal, a weekly shop shouldn’t cost more than €50.

However, if you plan to eat out, an affordable meal is around €10 nowadays.

Cost of Living in Faro for a Family of Four 

Kids are always more expensive. However, Faro is can be an affordable alternative to other European cities. Expect to spend at least €2600 a month for a family of four in Faro. 

A three-bedroom apartment in Faro will set you back around €1400. However, prices can go up to €1900 or more, depending on the apartment type and amenities. 

Budget around €200 a month for monthly transport passes. However, it is definitely more convenient for a family of four to own a car and drive. Fuel will cost you anywhere between €150 and €250 a month. 

Utilities cost around €150 and include electricity, heating, water, etc. However, this can be much higher in the winter or depending on your family’s consumption.

Groceries for a family of four in Faro should cost around €125 to €150 a week, so budget at least €500 a month.

If you need to purchase health insurance for the whole family, this will cost you at least €200 a month.

However, you might be eligible to use access to healthcare for free. EU citizens with a valid European Health Insurance Card can use the National Health Service (SNS) for free for up to 90 days in Portugal. After becoming legal residents, they can continue to use the SNS.

However, non-EU citizens are only entitled to use the public health system if they are employed and pay social security in Portugal, having to be registered as legal residents as well.

If you want your kids to attend an international school, this will cost you! While public schools are free, private international schools can cost between €6,000 and €20,000 a year. You could pay around €2000 a month for two kids just for education.