Buying a home in Portugal is becoming more expensive and the pace of increases shows no signs of slowing down. In the 4th quarter of 2021, the median price of the average family home in Portugal stood at 1,355 euros per square metre (euros/m2), reaching a new all-time high. This is an increase of 14.1% year-on-year and an increase of 12.2% compared to the previous quarter, according to the National Statistics Institute in Portugal (INE). In addition, the data shows that foreigners spent more than twice the amount paid by the Portuguese to buy a house in Greater Lisbon and in Algarve. Let's have a closer look at what house prices in Portugal have in store for 2022.
Cheap houses for sale in Portugal are becoming harder to find, as among the 25 regions analysed, only Baixo Alentejo (-2.5%) and Beira Baixa (-0.7%) recorded a year-on-year fall in house prices at the end of 2021. In all the others, the average house price increased over the same period of the previous year, according to INE.
The national statistics office also highlights the fact that the average value of property transactions in Portugal involving buyers with their tax residence abroad (non-residents) was 2,302 euros/m2, and that in the case of transactions made by buyers with their tax residence in Portugal (residents) this value was 1,319 euros/m2.
Foreigners pay more for houses in Lisbon and the Algarve
The two areas of the country with the highest house prices in Portugal in 2022, the Algarve and Lisbon, were those that saw foreigners make the biggest purchases when it comes to property price. The average price of properties purchased by those who aren't residents in Portugal, and therefore have their tax address abroad, was more than double the price of houses purchased by those who are residents in Portugal. In the Algarve, for example, foreign buyers paid an average of 2,547 euros/m2 and in Greater Lisbon 4,283 euros/m2. On the other hand, residents in Portugal paid 1,969 euros/m2 in the Algarve and 1,858 euros/m2 in Lisbon on average.
According to the data presented by INE, at the end of 2021 the year-on-year change in prices increased in 7 of the 11 municipalities with over 100,000 inhabitants in the Greater Lisbon area, with the acceleration being greater than that seen at a national level (+1.9%) in Setúbal (+9.8%), Loures (+3.0%), Almada (+2.2%) and Oeiras (+2.1%).
In the Metropolitan Area of Porto, the municipalities of Maia (+10.5 %) and Vila Nova de Gaia (+8.1%) also recorded higher year-on-year growth rates than the country. In the cities of Lisbon (+0.4%) and Oporto (+0.9%) "the acceleration was less expressive".
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