While much of Europe’s luxury property market is experiencing a slowdown, Lisbon stands out as a notable exception, continuing to see price increases despite broader economic headwinds. New data from Knight Frank, in partnership with Quintela + Penalva, show the Portuguese capital’s prime residential values rose 3.1% year-over-year in the third quarter, ranking 18th globally adn surpassing cities like London and Paris. This report examines the factors driving Lisbon’s resilience and it’s growing appeal to international investors in a shifting global market.
Lisbon’s luxury housing market continues to demonstrate resilience, bucking a broader slowdown in European property values. The Portuguese capital ranked 18th in Knight Frank’s Prime Global Cities Index, with prices rising in the third quarter, outpacing cities like Berlin, Dublin, and Paris.
Luxury home prices in Lisbon increased by 3.1% year-over-year in the third quarter, and 0.6% compared to the previous quarter, according to the latest report from Knight Frank, in partnership with Quintela + Penalva, which tracks prime property price movements across 46 global cities. This performance underscores Lisbon’s growing appeal to international investors.
Francisco Quintela, founding partner of Quintela + Penalva, stated, “These data demonstrate Lisbon’s growth capacity, its ability to attract investment, and its resilience. They also show that the city has consolidated its position as a leading destination in the high-quality residential market over the past few years.”
The price increase in Lisbon’s prime segment contrasts with a general cooling trend in the luxury residential market, which saw a global increase of 2.5% in the third quarter. Liam Bailey, Global Head of Research at Knight Frank, noted that “prime price growth slowed to its weakest pace in two years as cuts in interest rates decelerate, limiting overall performance.”
Lisbon’s performance matched that of Frankfurt and exceeded price increases in cities such as Berlin (2.7%), Dublin (2.3%), Paris (1.4%), and London, which experienced a 3.6% decline. The report attributes London’s drop to “the cost of finance and the market’s sensitivity to macroeconomic expectations.”
The Knight Frank report points to several factors driving Lisbon’s success, including demand exceeding available supply, continued attractiveness to international buyers despite recent tax adjustments, and relative stability compared to other European capitals. The Portuguese market is benefiting from a favorable combination of factors that are attracting both domestic and foreign investment.
Quintela added, “We believe that prices in Lisbon and other regions of the country, such as Comporta, Cascais – Estoril, and Porto, will continue to show appreciation potential in the coming years. This dynamism is the result not only of the high quality of new projects under development but also of the growing demand from national and international investors seeking solid, safe, and sustainable markets.”
Across Europe, the market shows moderate stability: Madrid (+6.1%), Zurich (+5.4%), and Geneva (+4.2%). Tokyo currently leads the rankings with a 55.9% year-over-year increase in the third quarter, driven by limited supply and currency effects related to the weakening yen, as well as a 30.2% increase from the second quarter.
Seoul, South Korea, ranks second with a 25.2% increase in the third quarter, followed by Bangalore, India (9.2%), Dubai (+8.5%), and Mumbai, India (8.3%) rounding out the top five globally.
Despite a 6.9% decline in the second quarter, Dubai remains the strongest market over the past five years, with a cumulative appreciation of 198%, followed by Tokyo (115%) and Manila (81%).
The study also addresses the Chinese market, which remains weak due to the government’s strategy of diversifying economic growth. “The Chinese government has intentionally shifted its focus from the real estate sector to the high-tech industry and domestic consumption as drivers of economic growth. Hong Kong is showing early signs of recovery following interest rate cuts,” the report indicates.
