Portuguese Housing Credit Growth Hits 17-Year High at 8.1% in July
The Bank of Portugal released its latest statistical bulletin this Thursday, revealing that the granting of new housing loans in the country accelerated to a year-on-year growth rate of 8.1% in July 2025. This figure represents the most significant increase in housing credit since August 2008, confirming the continued and intense activity within the Portuguese residential real estate market. The total stock of credit for housing purposes increased by 986 million euros in a single month, reaching a total of 106.3 billion euros.
This marks the 19th consecutive month of year-on-year growth, a clear indicator of the sustained demand that has characterized the market since the beginning of 2024. The central bank's data shows that the overall volume of credit granted to families, which includes mortgages, consumer credit, and other loans, grew by 8.0% compared to July of the previous year. This is the highest overall growth rate for household credit recorded in almost two decades, with the total outstanding amount exceeding 139 billion euros, a level not seen since February 2012.
The primary engine behind this record-setting expansion is the mortgage market. The Bank of Portugal's statement described the residential market as remaining "hot," a condition attributed to several converging factors. A recent easing of interest rates has made financing more accessible, while a suite of government support measures aimed at younger buyers has significantly stimulated demand. These incentives include a state guarantee for 100% financing and exemptions on both the property transfer tax (IMT) and stamp duty, effectively lowering the entry barrier for first-time homebuyers.
The combination of these elements has created a particularly favorable environment for property acquisition, leading to a surge in loan applications and approvals. This heightened demand is a key factor driving the market's current momentum. The report from the Bank of Portugal provides a detailed numerical confirmation of the market trends that real estate professionals have been observing on the ground.
Beyond the housing sector, the data also points to a broader economic recovery and increased consumer confidence. Credit for consumption and other purposes also demonstrated robust growth, increasing by 7.7% year-on-year, with a total outstanding value of 32.8 billion euros. Within this category, financing for automobile purchases was a standout performer, with a notable annual growth rate of 9.9%, bringing its total stock to 8.8 billion euros. Personal loans and credit card debt also saw healthy growth rates of 7.2% and 7.7%, respectively.
The central bank's statistics underscore a period of exceptional activity in Portugal's credit market, driven overwhelmingly by the demand for housing. The data confirms that despite rising property prices, access to favorable financing and government incentives are continuing to fuel a high volume of real estate transactions across the country.
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