Housing Demand Decentralizes in Portugal as Setúbal Overtakes Porto in Mortgage Applications
The Portuguese mortgage market is showing clear signs of decentralization, with a notable surge in demand in regions surrounding the major metropolitan areas, according to the latest housing credit report from the financial services platform ComparaJá. The July data reveals that while Lisbon remains the primary hub for mortgage applications, the district of Setúbal has now surpassed Porto in demand. Furthermore, the districts of Leiria and Santarém have seen their market representation double, signaling a significant geographic shift in where prospective homeowners are looking to buy.
The report indicates that in July, the Lisbon region accounted for 45.16% of all mortgage credit demand, maintaining its top position. However, the most significant change in the rankings was Setúbal's expressive climb to 14.52% of demand, up from 10.9% previously. This increase pushed it ahead of the Porto district, which registered 13.44% of the applications. The data also highlighted the rapid growth of Leiria and Santarém, with each district doubling its share to capture 4.84% of the national demand.
This trend points towards a fundamental restructuring of housing demand in Portugal. Pedro Castro, Head of Operations and Mortgage Credit at ComparaJá, analyzed the findings, stating, "Zonas como Setúbal, Faro, Leiria e Santarém ganharam força, mostrando que a procura está cada vez mais descentralizada e a fugir dos grandes centros.” (Areas like Setúbal, Faro, Leiria, and Santarém have gained strength, showing that demand is increasingly decentralized and moving away from the major centers.)
The underlying factors driving this shift are twofold. Firstly, the persistent and sharp rise in property prices within the main urban centers of Lisbon and Porto has pushed many buyers to seek more affordable housing options in peripheral areas. Secondly, the widespread adoption of remote and hybrid work models since the 2020 pandemic has given families greater flexibility in their choice of location, reducing the necessity of living close to a central office.
This new work-life paradigm has also led to a change in consumer preferences. The report notes a growing appreciation for properties that feature outdoor spaces, such as gardens or large balconies. These amenities are often difficult to find and prohibitively expensive in the densely populated centers of large cities but are more common and accessible in suburban and semi-rural districts like Setúbal, Leiria, and Santarém.
The economic implications of this decentralization are significant. The movement of homebuyers and investment into these regions is expected to stimulate local economies, fostering the development of the real estate market and related services outside of the traditional economic powerhouses of Lisbon and Porto. This can lead to more balanced regional development across the country.
Officials from the national banking association have observed similar trends, noting that while overall lending remains strong, the geographic distribution of that lending is becoming more widespread. This shift could influence future infrastructure and transport planning as populations grow in these formerly less-central regions.
It is important to note that the ComparaJá report is based on its own sample of clients and does not represent the totality of the Portuguese market. However, as a major digital platform for financial products, its data is considered a strong proxy for the current trends and evolving preferences of Portuguese consumers in the real estate and mortgage sectors.
The forecast suggests that this decentralization trend is likely to continue as long as the price differential between central and peripheral areas remains significant and flexible work arrangements persist. For real estate developers and investors, these emerging areas represent new frontiers for growth and opportunity within the Portuguese market.
Stay informed on Lisbon property market developments at realestate-lisbon.com.
