Portugal’s property deals hit record, adding to shortage of affordable homes

11:49 am Monday, December 23rd, 2024

LISBON (Reuters) – The value of Portuguese homes that changed hands in the third quarter rose 28% to a record 9.05 billion euros ($1.04 billion), potentially aggravating a shortage of affordable housing, as interest rates in Europe retreated from all-time highs.

The National Statistics Institute said on Monday almost 41,000 homes were sold in the quarter, up 19.4% year-on-year, and that the price of existing dwellings rose more than for new ones.

In the first nine months of the year, the value of homes sold rose 13.5% from the same time a year ago to 23.7 billion euros, slightly below 2022’s record of 24.4 billion.

The country’s chronic shortage of affordable housing has been aggravated by wealthy foreigners lured by residency rights linked to property investment and tax breaks offered by the state.

A tourism boom has also led to a surge in short-term holiday lets, exacerbating the squeeze on the housing market. It has prompted protests in Lisbon and other cities by locals struggling to afford a place to live.

The prices were highest in the densely-populated Lisbon metropolitan area and the wealthy north of the country, Monday’s data showed.

Tax residents in Portugal accounted for 93.5% of property deals, followed by those from other European Union countries, at 3.37%, and non-EU countries, at 3.13%.

($1 = 0.9618 euros)

(Reporting by Patrícia Vicente Rua; Editing by Andrei Khalip and Barbara Lewis)