Published on and written by Cyril Jarnias
Since the beginning of the war in Ukraine, the global economic landscape has experienced significant disruptions, with unexpected repercussions on the real estate market in Portugal. Attracting investors seeking stability, the country has seen a notable increase in property inquiries, influenced by political and economic uncertainty in Eastern Europe.
This phenomenon is not only changing buying and selling dynamics but is also transforming the profile of buyers, marking a decisive turning point for a sector already undergoing significant evolution.
A Market in Transition
In this article, we will explore how this geopolitical context impacts a transitioning Portuguese real estate market, analyzing the implications for local and international stakeholders.
Good to know:
Portugal remains a preferred destination for foreign investors due to its political stability and attractive programs such as the Golden Visa.
Geopolitical Consequences of the War in Ukraine on the Portuguese Real Estate Market
The influx of Ukrainian refugees to Portugal since 2022 has contributed to an increase in housing demand, particularly in major cities like Lisbon and Porto, where pressure on the rental market was already high. This influx adds to a record net migration (over 155,000 people in 2024), intensifying the strain on the residential real estate market, especially for affordable and small-sized homes.
Observed Effects on Demand
- Increased demand for short- and medium-term rentals in urban centers.
- Heightened competition for affordable housing, particularly affecting families and low-income individuals.
- Reinforcement of the upward trend in rents and real estate prices, already fueled by Portugal’s international appeal.
| City | Observed Trends | Market Consequences |
|---|---|---|
| Lisbon | Increased rental demand, pressure on affordable supply | Rising rents, strain on social housing |
| Porto | Similar dynamics, especially in central neighborhoods | Price increases, scarcity of moderately priced supply |
Impact on Foreign Investors
- The geopolitical uncertainty linked to the war in Ukraine has reinforced Portugal’s perception as a stable and secure haven for foreign capital, compared to other more exposed European markets.
- Investors from the European Union increasingly favor Portugal for its political stability, legal security, and geographic distance from conflict zones.
Factors Influencing Portugal’s Perception of Stability
- Neutrality and relative distance from the Ukrainian theater.
- Strong democratic institutions and pro-investment policies.
- Maintenance of attractive programs (although the Golden Visa has been partially restricted for residential real estate in major cities, it remains operational for other forms of investment).
Adaptations of Portuguese Public Policies
- Strengthening of reception and integration measures for Ukrainian refugees (facilitated access to employment, education, and housing).
- Mobilization of public housing and incentives for the private sector to offer temporary accommodation solutions.
- Regulatory adjustments to prevent speculation and protect vulnerable tenants amid increased pressure.
The migratory influx, combined with Portugal’s open-door policy, has created a context of strong demand, stimulating prices and reinforcing the country’s attractiveness for international investors, while posing challenges for housing access for the most vulnerable residents.
Potential Medium-Term Consequences
- Persistent pressure on rents and the available housing stock, especially in metropolitan areas.
- Need to expand rental market regulation measures and support for vulnerable populations.
- Increased opportunities for real estate investment in the high-end segment, but risks of heightened social division if public policies do not evolve quickly enough to meet demand.
Good to know:
The influx of Ukrainian refugees to Portugal has intensified housing demand in cities like Lisbon and Porto, thereby increasing pressure on the already strained local real estate market. Furthermore, the geopolitical uncertainty caused by the war in Ukraine has prompted many foreign investors, particularly from the European Union, to seek more stable investments, positioning Portugal as an attractive option due to its perceived security and relative stability compared to other more directly affected European countries. This has stimulated interest in the Portuguese market, further boosting demand and potentially real estate prices. In response to the crisis, the Portuguese government has adopted policies aimed at facilitating the reception of refugees, including initiatives for temporary housing, indirectly influencing the real estate market by increasing the need for accessible housing and modifying certain regulations to address this new pressure.
The Influx of Ukrainian Refugees and Their Housing Needs in Portugal
Estimated Number of Ukrainian Refugees Arriving in Portugal
Since the start of the war in Ukraine in 2022, Portugal has welcomed a significant number of Ukrainian refugees, although the exact figure varies by source and period.
It is estimated that several tens of thousands of Ukrainians have found refuge in Portugal, with particularly notable initial waves in early 2022.
This population adds to a Ukrainian community already present before the war, known for its relatively successful integration and higher-than-average education level compared to the Portuguese national average.
Reasons for Ukrainian Refugees Choosing Portugal
- Presence of a pre-existing Ukrainian community facilitating reception and integration.
- Simplified administrative procedures for obtaining temporary protection status.
- Climate of tolerance and proactive reception policy from Portuguese authorities.
- Employment opportunities in certain high-demand sectors.
- Active solidarity network, composed of associations, NGOs, and citizen initiatives.
Efforts by the Portuguese Government and NGOs for Housing
Key initiatives:
- Establishment of a temporary protection status granting access to employment, healthcare, and education.
- Creation of emergency reception centers in major cities (Lisbon, Porto, Setúbal) providing immediate accommodation upon arrival.
- Temporary housing programs through partnerships with hotels, hostels, and volunteer families.
- Development of permanent housing solutions in collaboration with municipalities and the private sector, notably through the allocation of vacant social housing or facilitating access to the rental market.
- Logistical and financial support from NGOs (Cáritas, Portuguese Red Cross, JRS Portugal, etc.) to assist refugees in finding long-term housing.
Most Affected Regions in Portugal and Impact on the Real Estate Market
| Region | Relative Number of Refugees | Effects on the Real Estate Market |
|---|---|---|
| Lisbon | High | Increased rental demand, pressure on rents in some popular neighborhoods |
| Porto | Significant | Temporary increase in demand, mobilization of public and private housing |
| Setúbal, Braga | Notable | Moderate pressure, municipal reception initiatives |
Major urban agglomerations concentrate the majority of arrivals, which intensifies pressure on an already strained market, particularly for rentals.
Occasional rent increases have been observed in high-demand areas, although other factors (tourism, speculation) also contribute to this dynamic.
Challenges Encountered
Limited capacity of reception infrastructure (saturated shelter centers in some cities, lack of affordable housing).
Difficulties in social integration (learning Portuguese, recognition of diplomas, access to skilled employment).
Schooling of children in already overcrowded institutions.
Psychological support for refugees suffering from trauma.
Family fragmentation and uncertainty about the length of stay.
List of main challenges:
- Saturation of emergency shelter capacities.
- Shortage of affordable housing, especially in urban areas.
- Administrative delays in accessing social rights.
- Language barrier and cultural adaptation.
- Coordination between public and associative actors.
Important text:
The massive arrival of Ukrainian refugees has tested Portugal’s reception capacity but has also revealed strong institutional and citizen solidarity. Pressure on the housing market remains a major issue, requiring sustainable solutions for both newcomers and the local population.
Good to know:
Since the beginning of the conflict in Ukraine, Portugal has welcomed approximately 50,000 Ukrainian refugees, attracted by its favorable reception policy and temperate climate. The Portuguese government, in cooperation with various NGOs, has implemented temporary housing solutions, such as shelter centers and shared apartments, and is working on integration into the rental market for more permanent solutions. Major cities like Lisbon and Porto have felt increased pressure on the real estate market, with rising demand leading to higher rental prices. Less densely populated regions, such as Alentejo, have been less affected but offer interesting alternatives with lower housing costs. However, the influx has highlighted challenges, including the limited capacity of urban infrastructure and the need to facilitate the social integration of refugees, with specific initiatives aimed at expanding access to education and essential public services.
Impact of Geopolitical Instability on Real Estate Investments in Portugal
Geopolitical instability, particularly the war in Ukraine, has had repercussions on the Portuguese real estate market, but the country maintains an image as a safe haven destination, reinforcing its attractiveness to foreign and local investors.
Investor Behavior Amid Geopolitical Tensions
- Foreign investors favor Portugal for its political stability, safety, and economic resilience in a European context marked by uncertainty.
- The war in Ukraine has increased Portugal’s perception as a “safe haven” destination, which has fostered an influx of capital, particularly from Northern Europe and countries seeking stability.
- Local investors remain active, benefiting from attractive financing conditions despite international volatility.
Perception of Portugal as a Secure Investment Destination
- Portugal is regularly cited by experts as a “competitive and growing” market, with attractive prospects for national and international investors.
- Political stability and legal security are major arguments, especially given the reshaping of investment flows in Europe.
- Compared to other Mediterranean markets, Portugal benefits from an image as a “safe haven” in the region.
Effect of Economic Sanctions and Impact on the Real Estate Market
- Sanctions against Russia have redirected a portion of international capital flows toward countries perceived as more stable, such as Portugal.
- The Portuguese real estate market has benefited from increased demand for short-term rentals, particularly in Lisbon and Porto, linked to the partial recovery of tourism despite the international context.
- Real estate prices increased by 4.3% between January 2024 and January 2025, with strong dynamics in some cities (Évora: +17.3%, Beja: +16.1%).
Key Statistical Data
| City | Average Price 2025 (€ / m²) | Annual Variation (%) |
|---|---|---|
| Lisbon | 5,922 | -1.1 |
| Porto | 3,628 | +3.2 |
| Évora | – | +17.3 |
| Beja | – | +16.1 |
| Algarve | 3,467 | – |
- The market remains dynamic, but homeownership is becoming more difficult for the middle class.
- Portuguese prices remain competitive compared to other European destinations, attracting a diverse international clientele.
Expert Testimonials
“Portugal continues to attract investors seeking security and profitability, especially in a context of geopolitical tensions in Europe.”
“International demand remains strong, supported by the perception of a stable environment and favorable tax conditions for non-residents.”
Future Prospects and Strategic Positioning
- Portugal can strengthen its position by leveraging its stability, quality of life, and tax attractiveness.
- Diversification of the offering (logistics, residential rentals, high-end tourism) allows capturing different investor profiles.
- Experts anticipate continued price increases, but at a moderate pace, with sustained demand for properties in major cities and tourist regions.
- The country must continue to ensure legal security, transaction transparency, and an attractive tax policy to consolidate its role as a safe haven in times of global uncertainty.
Key Takeaway:
Portugal is benefiting from European geopolitical instability to strengthen its real estate attractiveness, offering a dynamic, competitive market perceived as a haven of stability by international and local investors.
Good to know:
The impact of geopolitical instability, notably the war in Ukraine, has prompted cautious behavior among real estate investors, although Portugal is perceived as a stable destination in this crisis context. Economic sanctions have affected international trade, leading to changes in capital flows, which has indirectly influenced the Portuguese real estate market. According to experts, demand for residential properties has seen a slight increase, supported by the country’s perception as a safe haven. In 2022, the market recorded a 5% increase in foreign investments, illustrating this persistent appeal. To maximize these advantages, Portugal could strengthen its position by highlighting its economic and political stability, while developing incentives for investors, particularly in the tourism sector, to consolidate its resilience amid global geopolitical turbulence.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
