In 2022, housing prices in Portugal increased by 13.2% compared to the second quarter of 2021. According to the country’s statistical institute, this is the biggest increase since 2010.

Price boom especially applies to the capital of Lisbon — at the moment, you can buy there an apartment at a price €3400 per «square meter». Following the capital in the price ranking are the cities of Porto and Funchal. The main reason for such a «takeoff» in real estate prices — the protracted issuance of new licenses for construction and, therefore, the lack of housing on the market.

The fact that foreigners have recently begun to buy Portuguese real estate in huge quantities also plays a role. This is influenced by many factors: the mild climate of Portugal, the tax benefits it provides, and the transition of a myriad of people to a remote work during the pandemic. And since foreigners are willing to pay for a house in a warm country twice as much as the locals, it is logical that the price of housing rises. The Portuguese themselves, of course, are not happy about this trend.

What is the government doing to regulate housing costs and demand?

The Portuguese government is aware of these problems and plans to speed up the licensing process. After that, there will be more houses, and it will be much easier to meet the demand. But, according to officials, some concrete results have to wait, they need time. Of the specific measures already taken in the government: the introduction of a 2 percent cap on rent increases next year, the purchase of real estate in Lisbon and the northern city of Porto is excluded from the program «golden visa». This will help, among other things, to develop all other regions of the country. Read more about this program and how to get a residence permit for investment in Portugal in our article.

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