The real estate market in southern Europe’s three key countries continues to climb, with both sales and rental prices rising, though at different rates.
According to idealista’s June reports, Spain has reached record highs in both markets, while Portugal remains the most expensive overall, despite slower growth. In Italy, sales prices are still well below their historical peak, but rental prices have surged to new records, even ahead of Spain.
This article takes a closer look at the property and rental trends in key cities and major tourist destinations across Spain, Italy and Portugal.
The housing situation in Spain, Italy and Portugal
Portugal currently has the highest average asking price for homes in southern Europe, at €2,898/m², followed by Spain (€2,438/m²) and Italy (€1,828/m²). Of the three, only Spain has reached record highs in idealista’s historical data. In terms of annual growth, Spain leads with a 14% year-on-year increase in June, well ahead of Portugal (8%), which has slowed in recent months, and Italy (1.5%).
For rentals, Portugal is also the most expensive, with €16.7/m² per month, ahead of Italy (€14.9/m²) and Spain (€14.6/m²). Despite lower prices, both Spain and Italy are seeing record-high rents. Spain, in particular, stands out with a 9.7% year-on-year increase, nearly triple Portugal’s growth (3.5%) and nearly double Italy’s (5.5%).
The big cities: Madrid, Barcelona, Lisbon, Porto, Rome and Milan
An analysis of southern Europe's major cities highlights rising price pressures in the most dynamic cities, driven by a widespread supply shortage. Madrid has seen a sharp 25% annual increase in housing prices, reaching €5,642/m², its highest level ever recorded by idealista, and closing in on Lisbon (€5,769/m²), which also reached record highs despite a more moderate rise of just 2.3%. Both cities remain the most expensive housing markets among the three countries.
Barcelona (€4,920/m²) is fast approaching the Lombard capital’s price level, having recorded an 11.1% year-on-year rise and setting a new record. The Catalan capital is edging into the exclusive group of cities with average prices above €5,000/m².
Further behind is Porto (€3,792/m²), which saw a 6% annual rise, below Portugal’s average, but still reached a new price peak. Rome remains the most affordable of the cities analysed, at €3,215/m². Despite a 2.9% year-on-year increase, prices are still nearly 25% below their historical record.
In the rental market, Barcelona (€23.9/m²/month) and Milan (€23.7/m²/month) lead the rankings, followed by Lisbon (€22.2/m²/month) and Madrid (€22/m²/month). Rome (€18.4/m²/month) and Porto (€17.7/m²/month) offer more moderate rental prices.
The strongest annual rises were seen in Rome (12%) and Madrid (11%), although only Madrid reached record-high rental prices. Rome is now just 1.5% below its all-time high. Lisbon and Porto are also at record levels, with more moderate increases of 3.1% and 2.7%, respectively. Milan recorded the lowest growth (2.6%) but is nearly at its peak, while Barcelona rose 8.2%, sitting just 0.2% below its record rent.
Housing and rental prices in tourist capitals
Tourist-driven property markets across southern Europe show mixed trends, with Spanish cities leading the surge in prices.
Palma and Valencia stand out. The Balearic capital hit a record €4,907/m² after an 18.4% year-on-year rise, making it the most expensive city analysed. Valencia saw the highest increase overall, up 20.1% to €3,067/m² – also a new record.
Málaga (€3,459/m²) exceeded Valencia in price after a 14.7% rise, while Alicante (€2,435/m²) grew even more sharply at 16.4%. Las Palmas de Gran Canaria (€2,475/m²) also saw an increase, though more moderate at 7.5%, placing it 1.3% below its historic peak.
Beja recorded the sharpest price increase in Portugal, rising 17.8% to €1,278/m², making it the most affordable of the tourist-centred cities analysed in southern Europe. In contrast, Funchal in Madeira remains the priciest at €3,645/m², despite a more moderate rise of 7.6%. Ponta Delgada in the Azores rose 13.6% to €2,194/m², while Faro reached €3,285/m² after a 10.3% increase.
In Italy, Naples (€2,735/m²) and Cagliari (€2,445/m²) lead in prices, though growth was modest. Cagliari and Palermo rose 3.5%, while Bari edged up 0.6%. Genoa (-0.5%) and Naples (-0.1%) saw small declines. Only Cagliari is nearing its peak, sitting 5.5% below.
In the rental market, Palma (€18.3/m²/month) and Málaga (€15.6/m²/month) lead among the tourist destinations analysed, with rents already at record levels and continuing to rise, up 9.7% and 7.9%, respectively. Valencia and Naples both average €15.5/m²/month, but growth differs sharply: 9.9% in Valencia versus just 1.5% in the Italian city.
In Portugal, Funchal tops the list at €15/m²/month, ahead of Faro (€14.2/m²), which posted the strongest rental increase across all tourist cities, rising 12%. Palermo (€9.1/m²/month) saw an 11.1% rise, despite having the lowest rent among the cities analysed.