Property Sales Fall 23% in Third Quarter of 2025
Property sales in Madeira declined for two consecutive quarters, according to figures discussed in a recent RTP Madeira report, which interviewed two real estate agents, Meide Silvia and Bruno Tavares. This is what they concluded.
In the third quarter of 2025, the number of transactions dropped by 23% compared with the same period a year earlier. Real estate consultants say the fall follows several years of strong activity and points to structural limits in the current housing supply.
This, in my opinion, is basically because we are in a very dynamic, competitive market where there is high demand and few properties on the market, which pushes prices up and means families, especially locals, cannot access those homes.
Meide Silvia, RTP Madeira
Five Years of Strong Growth Leave Madeira Sensitive to Market Changes
Madeira has recorded the strongest growth in Portugal over the past five years. That position, it is argued, also makes the region the first to feel any change in market conditions. As sales slow, the impact becomes visible more quickly than in other parts of the country - a pattern now seen in both transaction volumes and values.
100% Youth Financing Increases Demand as Supply Stays Limited
Government-backed 100% mortgage financing for young buyers has increased demand. In mainland Portugal, young people are often pushed toward outer areas to buy homes. In Madeira, those areas are mainly Caniço and Câmara de Lobos, which face clear limits in the number of available properties, restricting how much additional demand the market can absorb.
Transaction Values Drop 9.6% Between July and September 2025
The slowdown is not limited to the number of deals. Between July, August and September 2025, the total value of transactions fell by 9.6%. Consultants link this decline to a more uncertain economic climate, which may lead some investors to delay purchases. They also note that asking prices in listings often represent owners’ expectations and do not always match actual market values.
Price Corrections Concentrated in Overvalued and Higher-End Homes
The price declines now visible in parts of the market are described as selective. Consultants say they mainly affect properties that entered the market at inflated prices and are now adjusting. At the same time, demand has weakened in higher-end segments, while more affordable homes remain scarce.
Rents Near €1,100 in Funchal Push Young Couples Toward Buying
According to Bruno Tavares, for young couples earning around €1,500 each, the choice between renting and buying has become narrow. Monthly rents in Funchal often range from €1,000 to €1,100. With bank financing of €350,000 to €375,000, monthly mortgage payments can reach similar levels, leading many to choose buying over renting.
Severe Rental Shortages Persist as Madeira Records Dual Decline Nationwide
Real estate agencies point to a severe lack of rental properties, with limited supply and strong demand keeping prices high.
Madeira stands out as the only region in the country to record simultaneous declines in both
the number of available housing on the market
the value of housing transactions
Summary - What Will Happen Next?
Sales Decline: Property sales in Madeira fall. In Q3 2025, transactions dropped 23% compared to the same quarter in 2024.
Transaction Values: The total value of transactions also fell, by 9.6% between July and September 2025.
High Prices Due to Limited Supply: Despite the decline, prices remain high because there are few properties on the market, both for sale and for rent. High demand, especially from locals and young buyers, keeps prices elevated.
Demand Drivers:
100% financing for young buyers increases demand.
Relatively low interest rates in recent years encouraged purchases.
Renting is expensive (e.g., Funchal rentals €1,000–1,100/month), pushing young couples toward buying.
Price Adjustments: Some price decreases are selective, affecting overvalued properties that are now adjusting, and in higher-end segments where demand is falling.
Regional Context: Madeira has grown faster than other parts of Portugal in the last five years, so it reacts first to market changes. It was the only region in Portugal to show simultaneous declines in both transaction numbers and values.
What do you think will happen next - is there going to be a major price correction and will real estate again become more affordable?
Source: RTP Madeira
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