A buying houses in Portugal has been cooling down, given the high costs of housing, along with high interest rates on loans and low purchasing power, which continue to be felt. And this cooling house search in the country has been reflected in prices. The National Statistics Institute (INE) reveals this Tuesday, April 23rd, that the set of homes sold in the final stretch of 2023 had a median cost of 1,619 euros per square meter (euros/m2), a value 7, 9% higher than the same period last year. But compared to the previous quarter, the house prices in Portugal fell 1.3%, a trend felt in 14 of the 24 most populous municipalities, Lisbon and Porto included.
“In the fourth quarter of 2023, the median price of family accommodation in Portugal it was 1,619 euros/m2, corresponding to a year-on-year rate of change of 7.9%”, begins by highlighting INE in the bulletin published this Tuesday, April 23rd. From the outset, it is clear that the house prices slowed down, as the year-on-year variation was lower than that recorded in the previous quarter (10.0%).
However, compared to the previous quarter, there was even a house price correction sold in Portugal. The median price of 1,610 euros/m2 recorded in the last quarter of 2024, represented a “decrease of 1.3% compared to the third quarter of 2023, reversing the growth trend that had been observed since the fourth quarter of 2022”, reveals also the Portuguese statistics office.
Families residing in national territory also bought cheaper houses between October and December 2023 than in the previous quarter: the median price of 1,584 euros/m2 was 1.1% lower. And the same is observed in the case of foreignerssince the median cost of houses sold for these buyers it was 2,241 euros/m2, 2.4% less than that recorded three months earlier. This fall of prices of houses purchased by foreigners was felt in transactions carried out by those living outside the European Union (-9.7%), as those living in Europe ended up buying houses that were 3.1% more expensive.
In relation to the same period last year, the median value of houses sold in Portugal involving buyers residing in the national territory was 8% higher. And the foreign buyers purchased homes for a similar median price (0.1%). Despite this evolution, foreigners continue to buy houses 41% more expensive than those who live in Portugal.
14 populous municipalities see house prices falling at the end of 2023
There are 14 of the 24 municipalities with more than 100 thousand inhabitants that felt the house prices falling between the last quarter of 2024 and the previous quarter. The biggest drops were felt in Matosinhos (-14.4%), followed by Porto (8.7%), Funchal (8.4%) and Barcelos (-8.1%). And the smallest descents of housing cost in this period they were felt in Vila Nova de Gaia (-0.8%) and Lisbon (-1.9%).
In year-on-year terms, “there was a slowdown in housing prices in 18 of the 24 municipalities with more than 100 thousand inhabitants, including all municipalities in Greater Lisbon, the Setúbal Peninsula, with the exception of Seixal, and the Porto Metropolitan Area, except Maia”, highlights INE. In the municipality of Porto, the house prices continued to rise at a slower pace (recorded a decrease of 11.9 pp) and the same was observed in Lisbon (-5.7 pp).
In the other six most populous municipalities, an acceleration in the growth of house prices, highlighting Maia (+7.8 percentage points, pp) and Vila Nova de Famalicão (+6.5 pp). “Oeiras was the only municipality to record a decrease in median house price compared to the same quarter of the previous year, 2.8%”, the document also reads.
Unsurprisingly, it was the municipalities of Cascais (4,176 euros/m2), Lisbon (4,086 euros/m2) and Oeiras (3,096 euros/m2) that presented the highest higher housing prices from the country. The populous municipalities with the lowest house prices are Barcelos (1,129 euros/m2), Guimarães (1,233 euros/m2) and Santa Maria da Feira (1,252 euros/m2).
House prices fall in 13 sub-regions of the country
Looking at the 26 sub-regions of the country, it appears that house prices fell in 13 territories between the last quarter of 2023 and the previous quarter, with the Autonomous Region of Madeira (-11.3%), Alto Tâmega and Barroso (-7.7%) and Porto Metropolitan Area (-6.6%) dealing with declines. The same was felt in Greater Lisbonalthough with less intensity (-2.4%).
On the other hand, the houses became more expensive in 9 territories in that period, with three sub-regions of Alentejo leading the increases. In the Coimbra Region and Ave, prices remained practically stable.
In homologous terms, “the median house price increased in 23 of the 26 sub-regions, with the West standing out with the highest growth (16.7%)”, says INE. The three territories where the price of houses sold fell were Douro (-15%), Alto Tâmega (-3.9%) and Beira Baixa (-1.2%).
“In the period under analysis, the sub-regions of Greater Lisbon (2,728 euros/m2), Algarve (2,623 euros/m2), Península de Setúbal (1,952 euros/m2), Autonomous Region of Madeira (1,869 euros/m2), Porto Metropolitan Area (1,776 euros/m2) and Alentejo Litoral ( 1,674 euros/m2) recorded housing prices higher than those in the country”, he also states. And he highlights that “as in previous quarters, Alto Alentejo presented the lowest median sales price of family accommodation (520 euros/m2)”.
