An IMGW News Report
Recent data from Knight Frank highlights that housing prices in Portugal are escalating at a notable pace, positioning the country as the 16th in a global ranking of property price increases. The analysis, which covers 56 countries, indicates an overall rise of 3.3% in house prices over the past year, ending in June. Moreover, in just three months, homes for sale have become 1.9% more expensive, suggesting a robust recovery in the global property market.
“The crisis is attributed to a chronic shortage of affordable housing, exacerbated by an influx of wealthy foreign investors attracted by residency rights and tax incentives, alongside a tourism boom that has inflated short-term rental prices.”
The report reveals that a significant 74% of the countries surveyed saw price increases, marking the highest level of growth observed in two years. This trend comes amid widespread protests across Portugal, where thousands have rallied against soaring rents and housing costs, voicing concerns that the crisis has left many unable to afford homes. Protesters carried signs with messages such as “Youths need houses to live,” reflecting a growing discontent among young people facing an increasingly unaffordable housing market.
Rita Silva, a spokesperson for the Fair Life movement, emphasised the ongoing struggle: “The situation hasn’t improved one bit in the last two years.” The crisis is attributed to a chronic shortage of affordable housing, exacerbated by an influx of wealthy foreign investors attracted by residency rights and tax incentives, alongside a tourism boom that has inflated short-term rental prices.
In response, the Portuguese government has unveiled a €2 billion spending package aimed at constructing around 33,000 homes by 2030. However, many remain sceptical, fearing that past initiatives have failed to address the underlying issues effectively.
Globally, the report notes that Turkey has experienced the most significant rise in housing prices, up by 46.4% over the last year, despite an inflationary backdrop leading to real-term declines. Other notable increases include Poland at 18% and Bulgaria at 15.1%. Although ranked 23rd, the US continues to see strong growth in home prices, with an annual increase of 5.5%. According to Knight Frank, some of this growth is due to falling mortgage rates, but most results from increased demand and limited supply of housing. However, they caution that rates need to fall much further for sales volumes to normalise.
At the end of the list are the 13 countries where homes for sale became cheaper in the last year, with Hong Kong leading the declines at 12.7%, followed by Luxembourg at 10.9%. With Portugal’s average house prices rising by 6.6% over the year, it remains an attractive destination for foreign investment, according to Francisco Quintela of Knight Frank Portugal.
