“In 2023 and the first half of 2024, 18% of new housing loans (excluding renegotiations and credit transfers) were granted to foreign citizens”, indicates the BdP in the November Financial Stability Report. In this sense, the weight of foreign citizens (residents and non-residents) in the stock of real estate credit increased from 6.9% in December 2022 to 8.2% in June 2024.

“The increase in the resident foreign population and the demand for housing by non-residents contribute to this growth. In aggregate terms, this effect will also be enhanced by a change in the demand profile, in particular by a greater demand for permanent housing by foreigners of working age and younger age groups”, explains the banking regulator.

Clara Raposo, vice-governor, considers that “the Bank of Portugal is interested in monitoring [this change in demand] so that we can better understand the nature of the credit that banks are granting, to whom and how”.

With regard to the purchase of houses in Portugal, non-residents represented 6% of the number of transactions and 10% of the amount in the first half of 2024, slightly below that observed in recent years. And the average purchase price of a house from a non-resident buyer (345 thousand euros) remained higher than the average value for residents (198 thousand euros). Among non-residents, there is also a difference in the average value of purchases between buyers with tax residence in the European Union, 280 thousand euros, and in other countries, 408 thousand euros.

“The foreign population residing in Portugal has grown significantly, offsetting the negative natural balances and contributing to the growth of the total population, with an impact on housing prices”, comments the BdP. In recent years, the demand for foreigners with greater purchasing power has been boosted by some measures, such as golden visas and the Non-Habitual Residents regime, admits the regulator led by Mário Centeno. However, these tax incentives ended between the end of 2023 and the beginning of 2024 resulting in a drop in demand for homes for sale in Portugal.