Portugal's Housing Loan Stock Surges 8.1% in July, Reaching Highest Growth Since 2008
The total stock of housing loans in Portugal reached €106.3 billion at the end of July, an increase of 8.1% compared to the same month in 2024, according to data released this Thursday by the Bank of Portugal. This represents the most significant year-over-year growth recorded since August 2008, signaling sustained acceleration in the country's residential mortgage market. The central bank's report highlights that the housing loan portfolio increased by €986 million in July alone compared to the previous month.
This surge in housing credit was the primary contributor to the overall growth in loans to the household sector, which expanded by 8.0% year-over-year, also the highest rate since August 2008. The total volume of credit to families surpassed €139 billion, a level not seen since February 2012. The Bank of Portugal's statement noted that this continuous acceleration confirms that the residential market remains notably active or "hot." This marks the nineteenth consecutive month of year-over-year growth in household lending, a trend that began in January 2024.
The expansion is taking place amid market conditions that have become increasingly favorable for property acquisition. A key factor has been the moderation of interest rates, which has improved financing affordability for buyers. This has been amplified by recent government measures aimed at supporting younger homebuyers. These incentives include a public guarantee enabling 100% financing of a property's acquisition value, alongside exemptions from the Municipal Property Transfer Tax (IMT) and stamp duty, which have collectively stimulated a marked increase in demand.
Beyond the housing sector, the report from the Bank of Portugal also detailed robust activity in other forms of lending. The stock of consumer credit and other loans grew by 7.7% compared to July 2024, reaching a total of €32.8 billion. Although this rate was slightly below the 7.9% growth seen in June, it reflects sustained consumer confidence and contributes to a picture of gradual economic recovery. Within this category, lending for car purchases was particularly strong, showing a year-over-year growth rate of 9.9%, with its total stock reaching €8.8 billion.
The data provides a detailed statistical view of a lending market responding to both macroeconomic conditions and specific policy interventions. The consistent growth in housing credit underscores the high level of activity and demand within Portugal's property sector. According to officials from the Portuguese Banking Association, financial institutions are responding to the increased demand with a competitive range of mortgage products, further facilitating market dynamism. The central bank will continue to monitor these trends closely as part of its mandate to ensure financial stability.
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