Build or Renovate in Portugal? 2025/2026 Forecasts
- Karolline Dutra
- Sep 13
- 8 min read
Updated: Sep 30
Opting to build or renovate a property is a strategic decision that impacts budget, lifestyle, and future appreciation.
In the 2025/2026 season, the Portuguese market presents specific trends for each choice, influenced by material costs, land availability, tax incentives, and new sustainability demands.
Building in 2025/2026: Challenges and Opportunities
Building from scratch continues to be the choice of those seeking total personalization and maximum efficiency. This path provides greater control over all project phases — from architectural design to the selection of construction materials — ensuring that the final result reflects not only the client’s lifestyle but also meets today’s industry demands. New builds are an opportunity to create spaces that adapt to each family’s specific needs, integrating modern technologies and sustainable solutions aligned with contemporary trends.
Fully Customized Projects for the Client
Opting for new construction means complete freedom in the creative process. Every detail of the project can be tailored, from the layout on the plot to the interior finishes. This includes choosing layouts that maximize comfort and functionality, as well as incorporating design elements that reflect the personality of the residents. It is the ideal solution for families who want a property made to measure, without adapting to the limitations of an existing structure. Personalization can also extend to areas such as efficient heating and cooling systems, smart home integration, and outdoor spaces designed to promote interaction and social living.
Energy Efficiency
In the coming years, new construction in Portugal will be required to comply with increasingly strict energy performance standards. Projects aligned with NZEB (nearly zero-energy buildings) are designed to reduce consumption, enhance comfort, and increase property value. Implementing technologies such as solar panels, efficient heating systems, and high-quality insulation not only contributes to environmental sustainability but also generates significant savings on energy bills over time. The growing awareness of the importance of energy efficiency is shaping buyer preferences, making these properties even more attractive.
Prospective Growth
Beyond immediate comfort, a new property requires less long-term structural maintenance and offers greater durability. This translates into stronger appreciation, making construction a solid bet for both living and investment. As cities expand and demand for quality housing rises, new builds tend to maintain or even increase their market value. Investing in new construction is therefore not only a practical decision but also a financially smart strategy, especially in a context where real estate appreciation is a reality in many urban areas.
Challenges to Consider
Despite its advantages, building involves obstacles that cannot be overlooked. Land prices in urban areas remain high, which may represent a significant challenge for many buyers. Additionally, bureaucratic licensing processes can extend timelines and complicate progress, making rigorous planning and a clear understanding of local regulations essential. The initial investment is usually substantial, so it is critical to account for all costs, from land acquisition to project completion. These factors demand technical support and careful supervision to avoid unpleasant surprises. Working with experienced architects, engineers, and consultants helps mitigate risks, ensuring efficiency and cost control throughout the project.
Renovating in 2025/2026: Appreciation and Sustainability
Property renovation has gained prominence in recent years, and in 2025/2026, the trend is expected to grow even stronger. With increasing demand for urban housing and policies encouraging heritage preservation, renovation emerges as an attractive option for those seeking privileged locations, architectural charm, and modernization.
The photo above is a great example: in Évora, in southern Portugal, many properties show signs of deterioration but offer significant potential for appreciation through rehabilitation. It is in this balance between tradition and modernization that one of the greatest opportunities for the future lies.
Tax Incentives and Support Programs
The Portuguese government has reinforced urban rehabilitation policies, recognizing the importance of revitalizing city centers and preserving heritage. In 2025/2026, these programs are expected to continue or expand, playing a crucial role in renovation projects. Incentives include tax benefits, such as exemptions and income tax deductions, along with dedicated financing lines that facilitate access to capital. For many clients, these supports make the difference between moving forward or not with a project, enabling owners and investors to undertake significant works without jeopardizing financial health.
Preserving Buildings with History
Renovation means respecting a building’s memory while giving it new life. It goes beyond restoration, requiring careful analysis of elements that define its identity. Features such as stone façades, traditional tiles, or old carpentry can be preserved and enhanced alongside modern solutions, like energy-efficient systems and updated construction techniques. The outcome is a unique property that combines cultural heritage and modern comfort, enriching both the market and the local community.
Sustainability as a Priority
Extending the life cycle of existing buildings is one of the most sustainable practices today. It reduces resource consumption and waste while revitalizing consolidated urban areas, contributing to more balanced and resilient cities. Sustainable renovation integrates eco-friendly practices such as recycled materials, renewable energy systems, and low-impact construction techniques. By transforming old buildings into efficient and modern spaces, renovation not only preserves culture but also promotes a more sustainable lifestyle.
Challenges to Consider
Despite its benefits, renovation presents significant challenges. Older buildings can reveal structural problems, such as compromised foundations or damaged walls, as well as outdated electrical and plumbing systems that do not meet current codes. Heritage protection regulations may also impose restrictions, complicating the process. These unexpected factors increase costs and timelines, making professional supervision essential from the outset. Qualified engineers and architects must be involved early to ensure compliance, safety, and functionality while preserving original features.
What to Expect from the Market in 2025/2026
Over the next two years, both building and renovating will remain relevant in Portugal, though each will follow distinct dynamics. The construction sector, a key driver of the economy, is set to undergo significant transformations that will impact both how new structures are built and how existing ones are renewed.
Renovation on the Rise
Property renovation has gained strong momentum, particularly in historic towns and cities, where demand for homes with architectural identity and heritage value is expected to grow significantly. This movement not only preserves local history and culture but also contributes to the revitalization of areas that may have been neglected over time. Renovation is increasingly seen as a way of breathing new life into old structures, maintaining their essence and charm while adapting them to modern needs for comfort and functionality. Furthermore, the appreciation of renovated properties in historic districts can lead to substantial increases in market value, attracting both investors and buyers seeking not just a home, but a piece of history.
Construction Expanding Beyond City Centers
New housing construction is growing rapidly, especially outside major urban hubs. More affordable land in suburban and rural areas is drawing an increasing number of families who want full customization in their projects. This trend is driven by the pursuit of quality of life, with households seeking larger living spaces, access to nature, and more tranquil surroundings. The possibility of building a tailor-made home that reflects the specific needs of each family is a strong attraction. Additionally, lower living costs in these areas, combined with the widespread adoption of remote work, are encouraging many people to reconsider their housing options and explore these new opportunities.
Sustainability at the Core of Decisions
Sustainability has become a central pillar in real estate investment and purchasing decisions. Energy efficiency — including technologies that minimize consumption — and the use of eco-friendly materials are now decisive factors for both clients and investors. More and more people are aware of the environmental impact of their choices and are seeking solutions that not only meet housing needs but also contribute to the preservation of the environment. This focus on sustainability helps reduce ecological footprints and often results in significant long-term savings, particularly in energy and maintenance costs. Real estate companies adopting sustainable practices are therefore not only aligned with market demands but are also positioning themselves as leaders in building a greener future.
A Mixed Trend
An emerging trend among many families is to maintain a renovated property in a central area while also investing in a new build in expanding regions. This mixed approach reflects a desire to balance the vibrancy of urban life with the calm of suburban or rural living. Families can enjoy the convenience of living in a renovated property close to services, culture, and entertainment while also benefiting from the space and personalization offered by a newly built home. This duality allows households to experience the best of both worlds and can also serve as a smart financial strategy, diversifying real estate investments and capitalizing on appreciation across different markets.
The next two years promise to be a period of intense activity in Portugal’s construction sector, with both building and renovation coexisting, each offering unique opportunities and challenges. The ability to adapt to these distinct dynamics will be crucial for the success of companies and professionals operating in the field.
4 Steps to Making the Right Decision
Deciding whether to build a new house in Portugal or renovate an existing property requires careful analysis. Both options offer significant benefits but also involve risks that can affect costs, timelines, and long-term appreciation. To make an informed decision in 2025/2026, follow these four essential steps:
1. Assess the Investment Budget
The first step is to define a detailed budget that includes all stages of the project.
Cost consultancy can help forecast licensing fees, materials, labor, and unforeseen expenses.
Financial clarity prevents unpleasant surprises and ensures that building or renovating remains within the planned limits. It also enables transparent scenario comparisons, helping you understand which path offers the best cost–benefit ratio.
This study can be carried out through tendering processes, direct contractor consultations, or benchmarking prices, ensuring greater accuracy in decision-making.
2. Compare Future Appreciation
Beyond the initial cost, it is essential to analyze how each option will affect the property’s long-term appreciation. Location, Portugal’s real estate market trends for 2025/2026, and regional demand directly influence return on investment. Professional estimates help forecast whether building or renovating will generate greater profitability in the medium and long term. It is also important to consider liquidity — the ease with which the property can be resold if necessary.
3. Reflect on the Desired Lifestyle
Building offers complete personalization and the possibility of integrating sustainable solutions from the start. Renovating historic properties, on the other hand, emphasizes central locations and proximity to services. Reflecting on the lifestyle you seek — creative freedom or urban convenience — is fundamental to aligning personal expectations with market realities. This is the moment to think not only about aesthetics but also about comfort, mobility, and daily functionality.
4. Ensure Technical Guidance
The success of any project depends on specialized technical guidance. Engineers and consultants ensure feasibility, compliance with deadlines, and strict cost control, while also guaranteeing adherence to legal standards. In 2025/2026, investing in professional supervision will be decisive for turning ideas into reality. At Guedu Atelier, we support every client through all stages, ensuring safety, quality, and results aligned with expectations.
Conclusion
Between building from scratch and renovating a property, there is no universal answer — the best choice depends on the client’s profile, location, and long-term goals. Both construction and renovation present unique advantages and challenges, making it essential to evaluate each scenario individually.
More than simply choosing between two solutions, it is about aligning dream, investment, and technical feasibility. With the right guidance, it is possible to avoid common mistakes, optimize costs, and ensure that the final result meets expectations.
At Guedu Atelier, we believe each project is unique and deserves attentive care from the very beginning. We accompany our clients through all phases — from cost analysis to execution — guaranteeing clarity, safety, and quality. Our commitment is to transform complex decisions into viable paths, creating spaces that combine identity, value, and future vision. Designing ideas, building dreams.
Written by Karolline Dutra
Civil e Environmental Engineer | Interior Designer
Building Conservation and Rehabilitation Specialist
Cost Consultant & Project Manager
Founder & CEO at Guedu Atelier
Do you have questions about your project?
Guedu Atelier is a consultancy company specialized in project management, cost consultancy, construction supervision, and interior design. We are ready to support strategic decisions and transform ideas into feasible projects, balancing quality, functionality, and investment.
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