Market Report Lagos 2024–25

The real estate market in Lagos has shown remarkable dynamism, with average sale prices continuing to rise, positioning Lagos as one of the most sought-after areas with the highest price increases in the Algarve. Foreign investment plays a significant role, accounting for more than half of the transactions in the Algarve region, with Lagos being a top destination for international buyers. The supply of new developments, including luxury residential projects and municipal housing initiatives, reflects ongoing construction activity in the municipality. The quality of life, safety, availability of quality healthcare and education services, and the vibrant cultural and gastronomic scene further enhance Lagos’s attractiveness for those seeking to live, invest, or enjoy a second home in southern Portugal.

Analyzing the number of family housing transactions in the municipality of Lagos between 2019 and 2024, there is a trend of recovery and growth in recent years . After a drop in 2020 (917 transactions), the number of transactions recovered in 2021 (1,063) and remained stable in 2022 (1,055). In 2023, there was a decrease to 900 transactions, which may reflect the impact of macroeconomic conditions. However, in 2024, the Lagos market showed resilience, with the number of transactions rising to 945. This change from 2023 to 2024 represents a growth of approximately 5%, indicating a recovery in transactional activity in the municipality and reinforcing its attractiveness in the Algarve real estate market.

An analysis of average property sale prices by Engel & Völkers shows a slight decline of 11.4% compared to 2023, with the average price reaching €4,200. The buyer profile in Lagos’s real estate market is predominantly international, with 95% of transactions carried out by foreign buyers, compared to just 5% by domestic buyers. In 2024, the main buyer nationalities were German, American, and British. The main reasons for purchasing in Lagos were mostly for a second residence (60%) and investment (30%), with only 10% intended as a primary residence. Regarding financing, a large percentage of purchases (80%) are made without the use of bank credit, indicating a buyer profile with high purchasing power and a preference for liquidity when acquiring property.

In the rental market, Lagos has shown a positive evolution in the number of new rental contracts. Analyzing the data between 2017 and 2024, and focusing on the last three years, there has been an increase in the number of new rental contracts, from 329 in 2021 to 308 in 2022, followed by growth to 330 in 2023 and 358 in 2024. This upward trend in recent years, despite a slight dip in 2022, reflects the growing demand for rental housing in Lagos. This demand may be driven by several factors, such as the increase in tourism, the arrival of new residents (including digital nomads and foreigners), and the difficulty in purchasing a home due to rising sale prices and interest rates. The revitalization of the rental market in Lagos is an indicator of its vitality and attractiveness as a place to live and visit.

The housing construction sector in Lagos has been variable in recent years . The number of new dwellings completed has fluctuated over the period, with a relatively low figure in 2022 and an increase to 122 in 2023 and 138 in 2024, showing a 13.1% growth. This growth trend over the past two years suggests an acceleration in the completion of housing projects. As for new building permits, Lagos registered a peak in 2021 (281), followed by a drop to 200 in 2022. In 2023, there was a recovery to 231 permits, but in 2024 a new decrease occurred to 163. The variation between 2023 and 2024 represents a decrease of approximately 29.4% in the number of new permits issued. The drop in permits in 2024, following an increase in 2023, may indicate a slowdown in the start of new projects, possibly influenced by factors such as construction costs, access to financing, or licensing processes. The combined analysis of completed dwellings and permits issued suggests that, although project completions have recently increased, the outlook for the start of new constructions in 2024 points to a slowdown.

The analysis of housing price growth (€/m²) in Lagos shows a consistent trend of appreciation since 2021 . In the first quarter of 2021, the average price per square meter was €2,120, and that value gradually increased over subsequent quarters, reaching €3,389 in the third quarter of 2024, representing a 59.9% increase since 2021.

In relation to the rental market, in 2024, average prices per square meter continued their upward trend , reaching €10.1/m² in 2024, registering an annual growth rate of around 9.8% since 2017.