Portugal ranked as the 7th European country with the highest increase in housing prices in 2024, according to the European Residential Report, published by BNP Paribas Real Estate in collaboration with Worx Real Estate Consultants.
Across Europe, residential prices rose by an average of 2.9% in the second quarter of 2024, with 21 out of the 30 countries analyzed reaching new record highs. In addition to standing out for its housing price growth, Portugal also demonstrated significant performance in the rental market, ranking 8th for the largest increase in rental prices.
This trend is attributed to a recovery in demand coupled with housing market challenges such as limited supply and stricter regulations. In Portugal, the parity between monthly mortgage costs and average rental prices has created a scenario where buying and renting are currently financially equivalent, according to experts.
“The buy-to-rent ratio compares the monthly cost of a mortgage with the monthly rental price for an equivalent property. This ratio shows it is significantly more advantageous to purchase a home in countries like Austria, Germany, or Norway. However, in Portugal, at present, there is no financial difference between the two options,” the report highlights.
Experts from BNP Paribas Real Estate and Worx Real Estate Consultants predict that the upward trend in property values across Europe will continue into 2025, driven by improved household incomes and declining interest rates. Similarly, rental price increases are expected to persist in the coming year, albeit at a slower pace.
However, limited supply may constrain the residential market’s growth in the coming months. “Investment will align with the opportunities available in the market next year, as the lack of supply is evident, and the residential sector continues to face significant imbalances between supply and demand,” the report concludes.
IN: Idealista
