According to a study published by the association Causa Pública, in an analysis of the last decade (2013-2023), the study authors concluded that house prices in Portugal more than doubled (121%), “which represents a real increase (above inflation) of 81%”.

Despite noting that the real increase in housing prices is a phenomenon on a global scale, the Portuguese variation is more than double that recorded on average (around 40%) of the developed economies of the Organization for Economic Cooperation and Development and more than four times that recorded in the Eurozone, which presents a real variation below 20%.

For Causa Pública, the current period of the last ten years has seen, in Portugal, a “strong increase in housing prices, with income not being able to keep up with them” and this trend “continued even during the period of pandemic and subsequent increase in interest rates”.

“The increase in house prices throughout 2024 does not suggest a reversal of the trend,” warned the association.

Other data reveal that, on average and over the same period, house prices in Portugal grew 6.1 percentage points per year above the inflation rate, while incomes, under the same conditions, grew just 0.9 percentage points.

“Portugal is thus at the forefront in terms of increases in real housing prices: it is the fourth country in the OECD with the most relevant increases, the second in the European Union and the first in the Eurozone”, highlighted Causa Pública.

Income evolution

The authors argue that in other countries where there were also large increases in property prices (such as Hungary or Ireland), income growth allowed, on average, the population to accommodate part of the price increase observed in the housing market. , which did not happen in Portugal.

“On the contrary, if we take into account the dynamics between the evolution of income and housing prices, Portugal's relative position has deteriorated. In Portugal, the worsening of the housing accessibility index has been much higher than the average for the OECD, the Eurozone and the remaining countries in Southern Europe”, they observed.

The study, coordinated by economist Guilherme Rodrigues and written by Ana Drago, João Reis, Guilherme Ferreira and Nuno Serra, also indicates that in the same period, Portugal appears as the OECD country in which this index deteriorated the most.

“Drastic trajectory”

“The fact that Portugal is on a more drastic trajectory than countries like Canada and New Zealand, which, among other policies, resorted to unorthodox measures such as banning the purchase of property by non-residents, shows the degree of severity and urgency of the national housing crisis”, they stressed.

Regarding prices practiced in Portuguese territory, these point to more than double the cost of housing between 2013 and 2024 - which corresponds to an average increase of 7.2% per year - with the Lisbon Metropolitan Area (Greater Lisbon and Península de Setúbal), the Porto Metropolitan Area and the Algarve recording the biggest price increases.

Alto Tâmega and Barroso, Douro and Alto Alentejo were the regions that had price increases much lower than the national average.

“These strong increases contribute to the higher rate of housing expenditure overload (households whose weight of expenditure associated with housing is greater than 40%) in the Algarve, followed by the Lisbon Metropolitan Area”, they pointed out.

Also according to Causa Pública, the housing crisis “by having a particular impact on Greater Lisbon, the Setúbal Peninsula and the Porto Metropolitan Area, along with its impact on the Algarve, more related to tourist dynamics”, assumes an essentially metropolitan character.

“As Portugal is one of the countries with one of the most serious housing crises among advanced economies, the Lisbon Metropolitan Area constitutes the epicenter of this crisis”, emphasised the association.