Housing: Portuguese navigate affordability in 2023
Against the backdrop of soaring housing prices, interest rates, and the overall cost of living, families residing in Portugal displayed a continued trend of opting for more affordable housing options and securing lower-value housing loans as 2023 drew to a close.
The most recent quarterly report from the Spanish real estate portal services provider Idealista in Portugal sheds light on the housing market dynamics, revealing intriguing insights into the purchasing patterns and financial decisions of both local residents and non-residents in the country. In examining the mortgages formalised during the fourth quarter of 2023, it becomes apparent that Portuguese families, faced with the challenges posed by the prevailing economic landscape, are making strategic choices in their pursuit of homeownership.
The report suggests that families residing in the country are purchasing houses at lower prices but are relying on higher amounts of bank loans. Examining mortgages formalised in Portugal during the fourth quarter of 2023, it is evident that 35.5% of these contracts were designated for families within the country purchasing their first homes, a purpose slightly surpassed by credit transfers, which accounted for 38% of the total. Additionally, it was observed that one in every five housing loans originated from non-residents, including emigrants and foreigners.
Amidst economic challenges in late 2023, Portuguese families bought more affordable homes and secured lower-value housing loans.
For families in Portugal securing housing credit in the final quarter of the previous year, the average cost of purchasing their first home was 223,953 euros. This amount reflects a 14.1% decrease compared to the previous year and a 13.2% decrease compared to the preceding quarter. Furthermore, it was noted that the average purchase price of houses by Portuguese individuals is 14% lower than the purchase price of housing in Portugal by foreigners and emigrants, which stood at 260,370 euros at the end of the year.
This data underscores the trend of Portuguese families continuing to acquire more affordable houses that align with their family income, a pattern observed throughout the year. Even if they choose to progress with the purchase of homes that are more budget-friendly compared to those of non-residents, this indicates a consistent preference among the Portuguese for more reasonably priced housing options.
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