Madeira Property Market Report

Price Data by Municipality

Source: Le Corbeau aggregated data, Idealista price index, INE. Figures are estimates based on active listings and transaction data. Q1 2026.

Market Commentary

Funchal continues to lead on liquidity and price. Median days-on-market at 42 days suggests continued strong demand, particularly in the Lido, São Martinho, and Sé neighbourhoods. New development completions in Monte have added supply but been absorbed rapidly.

Ponta do Sol is the surprise standout this quarter: +13.4% YoY, driven by continued digital nomad demand and growing awareness of the village beyond early-adopter circles. We are seeing the first signs of price discovery in this market — buyers who bought in 2022–2023 are now sitting on 30%+ gains.

Calheta continues its outperformance (+11.2%) underpinned by limited new supply, the strongest sunshine hours on the island, and growing German and Scandinavian buyer interest.

North coast municipalities (Santana, São Vicente, Porto Moniz) remain value plays for buyers comfortable with the infrastructure trade-off. DOM of 138–180+ days reflects illiquidity, not lack of interest — prices are low because the buyer pool is narrow, not because the product is poor.

Rental Market

Madeira's rental market grew 7.4% YoY in 2024 — the fastest of any Portuguese region (source: INE). Q1 2026 data from AL registrations and platform occupancy rates suggests this momentum has continued:

• Funchal short-term occupancy: 76–84% average across the quarter
• Calheta occupancy: 68–74% (higher in summer quarter)
• Ponta do Sol occupancy: 71–78% (year-round nomad base supports non-summer)
• Long-term rent growth (residential): +6.2% YoY in Funchal; +8.1% in Calheta

The absence of a mainland-style AL moratorium in Madeira has kept short-term rental economics attractive. New AL registrations continued at pace in Q1 2026 with no regulatory headwinds.

Buyer Nationality Breakdown

Foreign buyers account for approximately 34% of all residential property transactions in Madeira (Q1 2026 estimate). The breakdown by nationality remains relatively stable:

• German: 18% of foreign buyers (concentrated in Calheta and west coast)
• British: 17% (Funchal and Machico most common; Santa Cruz for families)
• American: 10% (concentrated in Funchal; driven by NHR and D7 visa)
• French: 9% (growing; drawn by D7 and climate)
• Dutch: 7% (Sustalium-era corporate relocations + investment buyers)
• Other EU: 21%
• Other non-EU: 18%

Outlook: Q2 2026

We expect continued price growth of 5–8% island-wide through Q2 2026, with Ponta do Sol and Calheta likely outperforming. Key variables to watch:

• ECB rate cycle: If rates fall further, mortgage-financed purchases will accelerate. Most Madeira foreign buyers are cash purchasers, limiting sensitivity.
• NHR 2.0 take-up: The new 10% flat tax regime for new residents continues to drive enquiry from Northern European retirees and remote workers. Q2 typically sees higher D7 applications as Northern European tax year ends.
• New supply constraints: No major new-build completions expected in Funchal in Q2. This will keep pressure on secondary market pricing.
• Porto Santo watch: Talk of a direct Lisbon–Porto Santo high-speed ferry route is circulating. If confirmed, could be a material catalyst for Porto Santo prices.