House prices

Access to housing remains difficult in Portugal. And in this context, some people are looking for cheaper homes in cities or towns far from the big urban centres, in order to make house prices compatible with family budgets.

The purchase of houses in Portugal has been cooling down, given the high costs of housing, along with high interest rates on loans and low purchasing power, which continue to be felt. And this cooling in demand for houses in the country has been reflected in prices. The National Statistics Institute (INE) reveals this Tuesday, April 23rd, that the set of homes sold in the final stretch of 2023 had a median cost of 1,619 euros per square meter (euros/m2), a value of 7, 9% higher compared to the same period last year. But compared to the previous quarter, house prices in Portugal fell 1.3%, a trend felt in 14 of the 24 most populous municipalities, Lisbon and Porto included.

The uncertain climate marked by rising interest rates and high inflation is to shaking the luxury residential markets around the world, including Portugal. This is because luxury homes in the Algarve continued to increase in value by 12.3% in 2023 compared to the previous year, this being the fourth biggest increase among the 100 cities around the world analysed by Knight Frank.

Portugal continues to be an attractive country to live in, as well as invest in, despite the uncertain economic and political context. But the lack of homes for sale is a structural problem with no end in sight, as new home construction is not keeping up with demand in the country.

The richest families in Portugal earn around 21,000 euros gross per month. And they live in the municipalities of Lisbon and Porto, on their outskirts, and in Loulé, concludes the most recent analysis by the Ministry of Finance.