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Evolution of the real estate market in Portugal

Real estate market conditions in Portugal 

Economy: In 2015, economic growth in Portugal was 1.5%, higher for example than that of France (1.2%). Portuguese GDP (179 billion €) is lower than that of France (2184 billion €); the Portuguese unemployment rate (12.6%) is higher than that of France (10.4%).

Demography: Portugal has 10 million inhabitants for an area of 92,000 km2, a density of nearly 113 inhabitants/km2, superior to France’s (104 inhabitants/km2) and close to that of the EU (116 inhabitants/km2). Portuguese are more concentrated in urban areas (urbanization level of 74%) than the French (66%).

In Portugal, younger generations leave the family home later (29 years old) while life expectancy is 81, slightly lower than that of the France (82).

The Portuguese real estate market has been hit hard by the crisis of the years 2007-2013. The number of building permits has been divided by 9 (from 66,000 to 7,000 permits), the volume of mortgages was divided by 10 (from 20 billion to 2 billion euros), but this drop in activity was nonetheless accompanied by stable prices.

Since 2014, the volume of transactions (old and new) has recovered and reached 107,000 transactions in 2015 (+27% on 2014) and the number of mortgages has doubled (4 billion euros in 2015), still far from the pre-crisis levels. Prices increased by 3%. Main residences are divided between apartments (55%) and home (45%) and the proportion of owners is 75% compared to 70% in the European Union.

Finally, the average amount of mortgage remaining to be repaid by each owner household is 33,000 euros (vs 41,000 euros in the EU), which represents more than a third of the non-financial assets of households.