Portuguese buying cheaper housing and applying for larger mortgages
Portuguese families continued to buy housing at the cheaper end of the housing market scale and are taking on larger mortgages according to a study released by Idealista/créditohabitação.
Low salaries, higher mortgage costs and the cost of living are driving the phenomena as house prices, according to Público continue to rise, driven, in part, by overseas demand, in a market that has been slowing.
Compared with real estate transactions from foreigners and immigrants, families in Portugal are buying houses of lower value but have applied for more money from the banks according to the latest Idealista quarterly report on Portugal’s housing market.
Mixed rate mortgages are the types of mortgages most applied for both by residents and non-residents.
Some 35.5% of the mortgages were for first time buys now overtaking loan transfers (38% of the total).
Also, one in five mortgages were taken on by non-residents (foreigners and émigrés) according to the report.
According to Confidencial Imobiliário the house prices in Portugal increased by 11.8% in 2023 with its Diretor Ricardo Guimarães stressing that the “market is the result of a cycle of strong increases in house prices even in the cheaper geographical areas, but there is less margin now for sharp increases.”
Last year, house prices on mainland Portugal rose by 11.8% but rose at a slower rate than they had done in 2022 when increases stood at an overall 18.7% according to CI’s Index of Residential Prices.
The slowdown in the increase in house prices was also evident in the quarterly variation rate, which went from 3.7% in Q3 of 2023 to 1.6% in Q4 – the lowest of 2023.