New Housing Construction Costs Increased 3.9% in June
The New Housing Construction Cost Index (ICCHN) in Portugal rose by 3.9% in June compared to the same month in 2024, according to data released on Friday by the National Statistics Institute (INE). This represents a 0.3 percentage point acceleration from the year-over-year rate recorded in May. The increase was primarily driven by a sharp rise in labor costs, which climbed 7.3%. The price of construction materials experienced a more subdued increase of 1%. The INE report specifies that the labor component contributed 3.4 percentage points to the overall index change, while materials accounted for the remaining 0.5 percentage points. This disparity highlights the ongoing pressure from wage growth within the construction sector. An analysis of material prices shows significant divergence among different product categories. Glass and mirrors recorded the largest price surge, increasing by approximately 30%. The cost of air conditioning systems also rose by about 10%. In contrast, several materials saw notable price reductions, which helped to temper the overall index. The costs for bitumen, wood and wood-derived products, and steel and cast iron piping all decreased by around 10%. The data from INE provides a key indicator of the economic conditions facing property developers and the construction industry at large. The persistent rise in labor costs is a significant factor influencing the final price of new residential properties entering the market. These statistics are closely monitored by industry analysts to gauge inflationary pressures and forecast future trends in the real estate sector. The monthly ICCHN is a critical tool for understanding the supply-side dynamics of the Portuguese housing market. Monitor new development opportunities at realestate-lisbon.com.
