Household Savings Rate in Portugal Reaches 12.6% Amid 4.3% Rise in Housing Investment
Portugal’s households demonstrated increased financial prudence in the second quarter of 2025, with the savings rate rising to 12.6% of disposable income, the Instituto Nacional de Estatística (INE) announced this Tuesday. The figure marks a 0.2 percentage point increase from the previous quarter, reversing a minor decline observed at the start of the year. This development occurred as household investment, particularly in the housing sector, saw a significant advance of 4.3% during the same period.
According to the statistics authority, the recovery in the savings rate was driven by a 1.5% growth in household disposable income, which outpaced the 1.4% rise in final consumption expenditure. In its report, the INE stated, “The growth of Gross Disposable Income (RDI), combined with the 1.4% increase in final consumption expenditure (1.5% in the preceding quarter), determined a slight increase in the household savings rate to 12.6% (12.4% in the previous quarter).” The INE clarified that these figures are calculated in nominal terms.
The data also points to a strengthening of household balance sheets. Gross disposable income reached €19.3 billion in the second quarter, a 1.2% increase from the prior quarter. This financial bolstering appears to be directly influencing property investment decisions. The INE report highlighted that investment by families, “sobretudo ligado ao setor da habitação” (mainly linked to the housing sector), grew by a robust 4.3%.
Consequently, the family investment rate—measured as the ratio of Gross Fixed Capital Formation to disposable income—settled at 6.0%. This represents a 0.2 percentage point gain compared to the first three months of the year, signaling a growing allocation of household capital towards fixed assets, with real estate being the primary beneficiary. This trend underscores a renewed confidence in the property market among domestic buyers.
Economists are viewing the simultaneous rise in savings and housing investment as a sign of a healthy and maturing economic cycle. “The data reflects a positive shift in consumer behavior,” noted Sofia Almeida, an economist at a Lisbon-based bank. “Instead of leveraging debt, households are using their increased disposable income and savings to invest. This is a much more sustainable driver for the real estate market than credit-fueled expansion.”
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The consumption component was also detailed in the report, with the INE noting that price evolution influences the nominal variation. At constant prices, final consumption is estimated to have grown by 0.7% in the twelve months leading up to the end of the second quarter. This moderate consumption growth, when contrasted with the stronger rise in income, has created the necessary capacity for both higher savings and investment.
The trend is consistent with broader market observations of sustained interest in property across Portugal, particularly in major urban centers like Lisbon and Porto. The increase in domestic investment provides a solid foundation for the market, complementing the ongoing demand from international investors and expatriates. This dual source of demand is expected to support stable property value growth in the coming quarters.
The government is likely to welcome these figures as evidence of economic stability. A higher domestic savings rate enhances the resilience of the financial system, while increased investment in housing contributes to economic activity in the construction and real estate services sectors. The data suggests that the economic environment is fostering conditions conducive to long-term financial planning and investment by Portuguese families.
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