Source: Adobe Stock Author: Redaction Bank valuation of the square metre on the rise The value of the square metre in housing bank valuations reached a new high in May, reflecting a strong acceleration in the value of the square metre in Portugal. According to INE, the value of the square metre stood at €2,208, representing a year-on-year increase of 17.1%. This rise confirms the upward trend in the value of the square metre in Portugal in mortgage lending, with new historical highs. Apartments drive square metre value higher In apartments, the value of the square metre in Portugal rose to €2,580, with significant growth compared to the previous year. Greater Lisbon and the Algarve continue to record the highest square metre values, while other regions show lower levels. The evolution of the value of the square metre in Portugal was widespread across all regions, with no negative exceptions. More in-demand property types also recorded increases in the value of the square metre in Portugal. Houses and regional disparities In houses, the value of the square metre in Portugal reached €1,581, with a steady year-on-year increase. Greater Lisbon and the Algarve once again lead the value of the square metre in Portugal, while the Centre and Alentejo maintain the lowest levels. Regional variations confirm growing pressure on the value of the square metre in Portugal, with significant differences across the country. Bank valuations and market trend The number of bank valuations rose slightly, reflecting greater dynamism in mortgage lending. The increase in the value of the square metre in Portugal reinforces the upward trend in the real estate market, driven by demand and limited supply. The sustained rise in the value of the square metre in Portugal confirms the continuation of the growth cycle in the housing sector.
Source: Adobe Stock Author: Redaction Almeirim invests in affordable housing The Almeirim Municipal Council will move forward with an investment of around 1.5 million euros to build the infrastructure for a new development intended for affordable housing. The project foresees 168 new housing units and aims to respond to the increasing demand for housing in the municipality, creating accessible solutions for middle-class families. Funding will be secured through a loan and will allow the construction of water, sanitation, electricity, gas, communications, stormwater drainage and public lighting networks. New development plans 168 housing units The land, located between Rua Condessa da Junqueira and Rua Moinho de Vento, covers around 4.5 hectares and will host 28 residential buildings with typologies ranging from T2 to T4. All homes will be sold under an affordable housing scheme, helping to reduce the impact of rising property prices. In addition to housing, the plan includes the allocation of a plot for the construction of a Residential Structure for the Elderly and the reservation of another area for a future school facility, strengthening public services in the area. Project to be developed in phases The total investment required to build the buildings could reach around 30 million euros, so the municipality intends to proceed in phases. The council is assessing different financing lines, including public affordable housing support programmes, to ensure the project’s viability. Infrastructure works are expected to begin later this year, following the launch of the public tender, with a minimum duration of 12 months for this phase. Housing construction expected to start in 2028 According to the municipality, construction of the buildings should not begin before 2028, as it depends on the completion of the infrastructure works and the definition of the financing model. In the meantime, building projects will be prepared to allow construction to start once conditions are met. The council considers this investment in affordable housing a key priority for the municipality, alongside projects in health and education, aiming to increase the supply of accessible housing and respond to local population needs.
Source: Adobe Stock Author: Redaction IMF criticises measures for youth housing The International Monetary Fund (IMF) recommends that the Portuguese Government review youth housing support, arguing that these measures end up increasing demand and worsening imbalances in the housing market. The position is set out in the Article IV report on Portugal, released this week. Among the youth housing support measures in question are the public guarantee and exemption from IMT and Stamp Duty for people up to 35 years old buying their first home. According to the IMF, these youth housing measures aim to improve affordability but end up putting further pressure on the market. Impact of support on the housing market According to the IMF, youth housing support has contributed to rising demand, making it harder to address structural problems in the housing market. The institution argues that the focus should shift from demand to housing supply. The report highlights that imbalances in the housing market require more structural measures capable of increasing the number of available homes and stabilising housing prices. The IMF also warns about the impact of these supports on fiscal expenditure, which tends to increase with this type of incentive. IMF calls for increased housing supply The IMF considers that the solution to housing problems in Portugal lies mainly in boosting housing supply. Suggested measures include simplifying licensing processes, changes in zoning, and greater flexibility in land use. These housing sector reforms are seen as essential to sustainably improve housing affordability. The goal is to reduce constraints that limit new home construction and rebalance the housing market in the long term. Social support and market rebalancing Despite its criticism of youth housing support, the IMF argues that targeted support should be provided to the most vulnerable households. This support should come through social housing and specific subsidies, rather than broad incentives. The institution also stresses the importance of rebalancing taxation in the housing sector and improving the functioning of the rental market. The aim is to ensure a more efficient housing market, with greater supply and better access conditions.
Source: Adobe Stock Author: Redaction Mortgage interest rates resume downward trend Mortgage interest rates eased again in May, confirming a return to the downward path after a slight interruption in March. According to data from the National Statistics Institute (INE), the implicit interest rate across all mortgage contracts stood at 3.065%, down 1.2 basis points from April. In mortgage contracts signed over the last three months, interest rates also declined, falling from 2.833% to 2.820%. This development reinforces a stabilisation trend after a period of adjustments in financing costs. Mortgage lending continues easing trend Despite the increase recorded in March, mortgage interest rates resumed their downward movement in April and May, extending a trend that has been in place since the start of 2024. This behaviour indicates that housing finance costs continue to ease, albeit gradually. In the same period, the average mortgage payment stood at €405, €1 higher than the previous month and €10 more than in May 2025. For more recent contracts, the average payment fell by €10 to €692, although it remains above the level recorded in the same period last year. Charges and outstanding mortgage debt The structure of the average mortgage payment shows that interest accounted for 48.9% of the total in May, reflecting the continued weight of financing costs in household budgets. The average outstanding capital across all mortgage contracts rose to €78,257, up €643 from the previous month. In contracts signed over the last three months, the average outstanding amount stood at €175,805, a decrease of €1,252 compared with April. Recent evolution of mortgage credit in Portugal The evolution of mortgage credit in Portugal shows a stabilisation trend, with lower interest rates and moderate changes in monthly payments. Despite occasional fluctuations, the mortgage market continues to reflect a more predictable environment compared with previous years, although costs remain significant for households.
Source: Adobe Stock Author: Redaction The illusion of the deposit when buying a home When buying a home in Portugal, many buyers focus only on the deposit amount and the monthly mortgage payment. However, there are several hidden costs when buying a home that appear in the very early stages of the process and can significantly change the initial budget. These charges are often underestimated and can create unexpected financial difficulties, especially when there is not enough savings available. In many cases, a lack of planning for these additional costs can even jeopardise the progress of the purchase process. Hidden costs in the mortgage process Before the final mortgage approval, there are mandatory expenses linked to the process. Among the main hidden costs when buying a home are the application fee and the property valuation, charged by the bank at the start of the process, regardless of whether the loan is approved. These amounts can range between €500 and €1,000, depending on the financial institution and the mortgage conditions. On top of this, there are also costs for the deed, registration fees and taxes, which cannot be included in the monthly payment and must be paid at the time of purchase. This set of hidden costs when buying a home can represent a significant share of the total budget and should be considered from the beginning of financial planning. How to avoid financial surprises To reduce the impact of hidden costs when buying a home, broader financial planning is essential. Instead of considering only the minimum deposit required, it is advisable to have a higher savings buffer that covers all initial expenses of the process. Another important step is carefully reviewing the Standardised Information Sheet for the mortgage, where all fees and charges are detailed. This document helps to better understand the impact of hidden costs when buying a home throughout the process. In addition, it is essential to set aside a budget for extra expenses such as moving costs, furniture or minor renovations, which are also part of the transition to a new home. Planning hidden costs when buying a home Buying a home requires more than just the ability to pay the deposit and monthly instalments. Hidden costs when buying a home play a decisive role in the feasibility of the process and can influence the final decision of buyers. Careful financial planning helps avoid surprises and ensures a smoother transition until the deed and key handover. Understanding all hidden costs when buying a home is essential to make safer and more sustainable decisions in the housing market.
Source: Adobe Stock Author: Redaction Demand for off-plan homes exceeds completed properties Demand for off-plan homes has been exceeding that of completed properties in the Portuguese market, especially in urban areas under greater housing pressure. In a context of limited supply, off-plan homes have become a natural response to market needs and to the growing interest from buyers in projects still under development. Recent data indicates that a significant share of new-build developments is still under construction, reinforcing the relevance of off-plan homes as the main driver of transactions in the residential segment. Confidence and the sales process in new-build property The sale of off-plan homes depends heavily on trust between developers, agents and buyers. In this type of product, buyers are not only acquiring a property, but also a promise of future delivery, making project credibility a key factor. Real estate professionals have been adapting their approach to marketing off-plan homes, placing greater importance on project communication, development positioning and building a clear narrative around the associated lifestyle. Today, many off-plan homes are transacted even before construction is completed, demonstrating strong demand and the market’s ability to anticipate. Market drivers behind off-plan homes The growth in demand for off-plan homes is directly linked to the scarcity of completed properties available at affordable prices, particularly in central locations. Difficulties in accessing housing further increase the attractiveness of this type of product. Another key factor is the expectation of value appreciation during the construction phase, leading many buyers to choose off-plan homes as an investment strategy. Developers also rely on this model to secure pre-sales and financially support projects. The preference for smaller typologies such as studios, one-bedroom and two-bedroom units further strengthens the dynamics of off-plan homes, which concentrate higher demand and lead generation. Buying off-plan homes: opportunities and risks Buying off-plan homes represents a relevant opportunity, both in terms of lower entry prices and phased payment conditions during construction. This model offers greater financial flexibility and access to modern developments. However, off-plan homes also involve risks that should not be ignored. Developer credibility, valid permits and careful contract analysis are essential to reduce uncertainty. In a market where off-plan homes play an increasingly central role, trust becomes a decisive asset. More than ever, the purchase decision involves not only the property itself, but also the security of the entire development process.
Source: Adobe Stock Author: Redaction Euribor rises and financing becomes more expensive The Bank of Portugal (BdP) projects a deterioration in financial conditions, with the 3-month Euribor rising to 2.4% this year. This development reflects a more restrictive monetary environment and is expected to have a direct impact on housing investment, increasing mortgage costs and reducing household borrowing capacity. The upward trend in interest rates is expected to continue in the coming years, in a context where tighter financing conditions are affecting housing investment decisions. The increase in Euribor affects both new contracts and variable-rate mortgages, placing additional pressure on the market. High inflation and restrictive monetary policy Inflation is expected to stand at 3.1% this year, gradually declining towards around 2% in the following years, mainly driven by rising energy prices. The impact of the conflict in the Middle East and higher oil prices remain key factors shaping price developments. At the same time, the European Central Bank has maintained a more restrictive monetary policy, with further interest rate increases to contain inflationary pressures. This strategy contributes to higher financing costs and reinforces the impact on housing investment, limiting demand and slowing new purchasing decisions. Housing investment loses pace The BdP estimates that housing investment will grow by only 2.4% on average between 2026 and 2028, below previous forecasts and significantly lower than recent years’ performance. This slowdown is driven by higher mortgage costs and weaker demographic dynamics. Housing investment is also affected by slower growth in household disposable income and more moderate population growth. These factors contribute to reduced pressure in the housing market. Despite the slowdown, the central bank maintains its forecast of 1.8% economic growth in 2026 and expects a stable GDP trajectory in the following years. The geopolitical context and financial conditions will continue to play a key role in housing investment behaviour.
Source: Adobe Stock Author: Redaction Home buying with new planning rules Buying a home in Portugal will undergo significant changes with new rules coming into force in September. The aim is to strengthen transparency in transactions and ensure greater legal certainty in the housing market, through the mandatory reference to the urban planning certificate in all real estate transactions. With these changes, notaries, land registrars, lawyers and solicitors will be required to explicitly state whether the property has an urban planning licence at the time of the deed. This requirement applies to land, buildings and units, directly affecting those who buy, sell or invest in housing. Transparency in deeds and risk of nullity The new rule establishes that the absence of reference to the urban planning certificate may render the transaction voidable. This means the contract is valid but can be challenged later by any of the parties involved. The legislation distinguishes several possible scenarios, including cases where the document is provided, merely declared or does not exist. In all cases, failure to record the information in the deed now has significant legal consequences, reinforcing transparency in the real estate market. This change aims to reduce risks for buyers and increase clarity in home purchase transactions, in a context where urban planning information becomes a central element in acquisition decisions. Licences, registration and new technical requirements The concept of an urban planning certificate is also redefined, now depending on a set of documents such as applications, proof of fees and administrative decisions. A simple payment receipt is no longer sufficient to validate an urban planning operation. Prior notifications and licences now follow more detailed rules, including compliance declarations and additional documentation, increasing technical requirements while also strengthening legal certainty for buyers and investors. Subdivision operations must also be mandatorily registered, with direct communication between municipalities and land registries whenever changes or invalidations occur, allowing stricter monitoring of property status. Market impact and municipal rules The new urban planning rules also affect municipal fees related to construction. Municipalities must now define clear criteria and limits for charges, reducing the unpredictability that previously existed in the housing sector. In addition, legal restrictions are introduced on municipal regulations that impose requirements or fees without a legal basis, making such rules invalid if they do not comply with the law. In the case of subdivisions, rules become more flexible regarding guarantees and encourage affordable housing solutions, balancing construction costs and housing supply. These changes aim to simplify procedures, increase transparency and strengthen confidence in the Portuguese housing market, with direct impact on buyers, developers and investors.
Source: Adobe Stock Author: Redaction Risk of losing support in 2026 Support for the young housing loan scheme may end in 2026, including IMT exemption, the public guarantee and special financing conditions. These mechanisms have made it easier for young people up to 35 years old to access their first home, allowing more than 77,000 to have purchased a property since 2024. The public guarantee, which allows financing of up to 100% of the property value, is currently only planned for contracts signed until 31 December 2026. Without an extension, 2027 could bring stricter conditions for accessing the young mortgage scheme. In a context of rising Euribor rates and high property prices, delaying the decision may result in higher financial effort and higher monthly repayments. What may change in the young mortgage scheme If support for the young housing loan scheme ends, several benefits will no longer be available. Main impacts include: IMT and Stamp Duty exemption: savings that may exceed €15,000 on the purchase of a home within current limits Public guarantee: financing of up to 100% of the property value, without the need for a 10% down payment Registration fee exemption: reduction in administrative costs related to the purchase More competitive loan conditions: lower spreads under young mortgage schemes In practice, the difference between buying a home in 2026 or 2027 under the young mortgage scheme may represent tens of thousands of euros over the life of the loan. Even if some measures are extended, there is no guarantee that current conditions will be maintained. High demand for the public guarantee may also affect its future availability. Young mortgage scheme and market context The young mortgage scheme remains one of the main routes to first-time homeownership, especially in a rising interest rate environment. Euribor increased again in 2026, putting pressure on repayments and raising the total financing cost. Delaying the decision may mean losing tax benefits and accessing less favourable credit conditions. Although the young mortgage scheme still combines state support and competitive bank offers, this framework may change quickly. At the same time, property values continue to rise, increasing entry costs and reinforcing the importance of timing. Assessing the timing of purchase In the young mortgage scheme, timing plays a decisive role. Buying in 2026 still allows access to tax exemptions, the public guarantee and more favourable financing conditions. Uncertainty about the continuation of support makes the decision more sensitive, especially for those relying on these measures to purchase their first home. Analysing financial circumstances, simulating scenarios and comparing young mortgage offers are essential steps to assess whether it is better to move ahead now or wait.
Source: Adobe Stock Author: Redaction House purchase prices reach record level Buying a house in Portugal has become more expensive in recent months. The latest data shows that the average housing price has reached 3,142 euros per square metre, representing a 10.2% increase compared with the same period last year. This rise confirms the ongoing appreciation trend in the national real estate market, with demand remaining strong across several regions of the country. The recorded value represents a new historic high, making access to housing increasingly challenging for many families. Among the cities with the highest prices, Lisbon remains in the lead, with a median value of 6,124 euros per square metre. It is followed by Porto at 4,064 euros, and Funchal, where the average price already exceeds 3,800 euros per square metre. Faro and Setúbal also continue to rank among the most expensive housing markets. Santarém leads price increases Price developments have not been uniform across the country. Santarém stood out as the district where buying a house became significantly more expensive, recording a 30.9% increase over one year. Right behind come Portalegre, Beja, Bragança, Coimbra and Viseu, all with increases above 22%. These figures reflect growing interest in areas outside major urban centres, where prices were traditionally more affordable. On the other hand, some regions recorded more moderate increases. Évora saw a 9.4% rise, while Lisbon, Porto and Funchal posted growth of less than 10%, although they remain among the most expensive markets in the country. Regions continue to appreciate housing The data shows that house prices increased across almost all districts and islands analysed. Only the island of Faial recorded a price decline, with a 3.7% drop. In contrast, Porto Santo stood out with the highest annual increase, at 26.8%. At regional level, all areas of the country recorded growth in housing prices. The Alentejo led regional increases with a 19.9% rise, followed by the Centre region with 15.4%, and the Autonomous Region of the Azores with 12.7%. The trend shows that buying a house continues to require an increasingly higher investment, in a market where property values remain broadly on the rise with no clear signs of slowing down.
Source: Adobe Stock Author: Redaction Mortgage payment rises again The mortgage payment is expected to rise again in June for thousands of families with home loans indexed to Euribor. After a prolonged period of falling interest rates that began in 2024, the trend has reversed in recent months, reflecting developments in the financial markets and expectations surrounding the monetary policy of the European Central Bank (ECB). According to simulations released by DECO, a family with a €250,000 mortgage, a 30-year term and a mixed rate indexed to the six-month Euribor could pay an additional €12.84 per month at the next mortgage payment review. The increase results from the rise in Euribor recorded in recent weeks. Euribor drives higher costs The evolution of Euribor continues to be the main factor behind changes in the mortgage payment. In the case of contracts linked to the 12-month Euribor, the increase could be around €9.81 per month for a €250,000 loan. For contracts indexed to the three-month Euribor, the expected increase is approximately €6.16. The impact varies depending on the outstanding capital, the spread agreed with the bank and the remaining term of the loan. For a €150,000 mortgage, for example, the mortgage payment could increase by around €7.70 if it is linked to the six-month Euribor. Market forecasts point to a possible increase in the ECB’s key interest rates during June, in a context marked by persistent inflation and international geopolitical instability. Even so, the relationship between ECB decisions and Euribor movements is neither automatic nor immediate. Families feel pressure on household budgets The increase in the mortgage payment comes at a time when many families continue to face high costs for energy, food and other essential goods. Although the expected increases are lower than those recorded during the peak of the inflation crisis, they represent a new financial burden for homeowners with mortgages. Recent data also show a change in financing habits in Portugal. Most new contracts are currently signed with mixed rates, combining an initial fixed-rate period with a subsequent variable-rate period. This option has helped reduce the immediate impact of Euribor fluctuations. Market follows interest rate developments The mortgage payment will continue to depend on the evolution of interest rates in the coming months. Despite some recent stabilisation, the Euribor trend remains slightly upward, which could lead to further upward reviews for some contracts. Experts recommend that mortgage holders regularly monitor market conditions and assess possible alternatives with financial institutions. Proactive household budget management may be essential to absorb future increases in mortgage payments and reduce the impact of interest rate fluctuations.
Source: Adobe Stock Author: Redaction Buying a home in cohabitation legal risks Buying a home in cohabitation is an emotional, financial and legal decision. In Portugal, cohabitation does not automatically create property rules, unlike marriage, which increases risks when buying a home. Without prior definition, buying a home in cohabitation can lead to conflicts in case of separation. The main problem arises when there is no clear documentation regarding property ownership, shares and payments. In buying a home in cohabitation, lack of agreement can turn a joint decision into a complex dispute. Property and mortgage in home purchase In buying a home in cohabitation, a common mistake is confusing the mortgage with property ownership. Being responsible for the mortgage does not mean being the owner of the property, and vice versa. Another risk in buying a home in cohabitation is automatically assuming a 50/50 split without reflecting each person’s real financial contribution. The deed defines property ownership, so any differences in payments must be agreed and recorded. It is also essential to distinguish between who pays the mortgage and who owns the property. In buying a home in cohabitation, this difference can have a direct impact in case of separation. Legal risks in cohabitation In buying a home in cohabitation, the lack of written proof of payments and contributions can lead to conflicts. Without clear records, it becomes difficult to demonstrate who paid what for the home. Another risk in buying a home in cohabitation arises when only one name appears on the property deed, even though both contribute to the mortgage or expenses. In these cases, legal protection is limited. When the home is purchased from family members, risks increase if there is no clear documentation. Buying a home in cohabitation requires full transparency to avoid future disputes. How to prevent problems when buying a home To reduce risks when buying a home in cohabitation, it is essential to define shares, responsibilities and payments in advance. A written agreement can help clarify property ownership and the mortgage. Another important point is to anticipate separation scenarios. In buying a home in cohabitation, it should be clear what happens to the property if the relationship ends. Finally, legal formalisation is essential. Buying a home in cohabitation should be supported by legal advice to ensure that property, mortgage and contributions are properly aligned.
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