New Affordable Homes in Portugal Marketed as Attainable Dream
\nThe prospect of owning a new construction home in Portugal is being presented as an achievable goal, with developers marketing modern, practical, and affordable properties to first-time buyers. These homes are promoted as featuring well-designed spaces, efficient materials, and solutions aimed at providing comfort while reducing monthly expenses. The appeal lies in their contemporary design and the freshness that only a newly built property can offer, suggesting that the time may be right for prospective buyers to enter the market.
\nThis marketing push comes alongside new data from the Instituto Nacional de Estatística (INE), Portugal's national statistics institute. The latest figures show that the year-on-year rate of change for the Construction Cost Index for New Housing on the mainland was -0.1% in November. This represents a slight decrease in the rate of cost growth, being 0.6 percentage points lower than the rate observed in the preceding month. The methodology for this index tracks the costs of materials and labor in the construction sector.
\nIn addition to the new construction data, the INE also reported on the Index of Prices for Maintenance and Regular Repair of Housing. This index showed a year-on-year change of -0.3% in November, compared to -0.1% in October, indicating a slight decrease in the costs associated with the upkeep of residential properties. These statistical findings suggest a potential stabilization or slight reduction in the costs faced by both builders and homeowners.
\nHowever, the supply side of the market continues to face significant challenges. A separate study titled “Setores Portugal ‘Sociedades Imobiliárias’” by the business information company Informa D&B, reveals a dramatic decline in the completion of new homes. According to the study, the number of completed dwellings in new constructions in Portugal last year was below 9,500 units. This figure represents a 54% fall when compared to 2013 and a stark 92% drop from the levels seen in 2012, highlighting a long-term trend of reduced residential construction activity.
\nThis severe lack of new housing supply is a critical factor influencing the market. Real estate analysts point out that while construction costs may be stabilizing, the low volume of new homes entering the market continues to put upward pressure on property prices across the board. An economist from a major Portuguese bank commented, “The fundamental issue is one of supply. Until we see a significant increase in the pace of new construction, affordability will remain a major challenge for the average buyer, despite what marketing materials might suggest.”
\nThere has been no direct government response to these specific statistics, but housing affordability remains a central topic of political discussion. The government's ‘Mais Habitação’ (More Housing) program includes various measures aimed at stimulating construction and increasing the housing stock, but the impact of these initiatives on the number of completed homes is yet to be reflected in the data.
\nHistorically, Portugal saw a construction boom in the early 2000s, which was followed by a sharp decline after the 2008 financial crisis. The market has been in a slow recovery since, but the current completion numbers are far from the peak, creating a persistent housing deficit in the face of strong demand from both domestic and international buyers. The current market situation presents a mixed picture for potential buyers: while the dream of a new home is heavily promoted, the statistical reality points to a highly competitive market with limited supply. Stay informed on Lisbon property market developments at realestate-lisbon.com.
