House Builders in Portugal Undeterred by Higher Interest Rates

House building continues apace in Portugal as the number of homes completed went up 9.9% in Q3 2023 compared to the same time last year. The north (including Porto) saw a 14.5% increase while Lisbon saw just 0.9%. The biggest increases were in Alentejo, Madeira and Açores albeit from a lower base. The Algarve was the only region where completions fell.

Region1 year Change%4 year Change %Q3 2019Q3 2022Q3 2023
Portugal9.9%63.9%3,3995,0685,571
Norte14.5%79.8%1,3992,1982,516
Centro5.2%41.1%7911,0611,116
Alentejo30.3%48.6%185211275
Lisboa0.9%88.8%59911211131
Algarve-40.0%-41.7%278270162
Açores43.0%101.3%76107153
Madeira118.0%207.0%71100218
Completed Dwellings by Quarter (Source: INE)

Home building is nowhere near as frenetic as it was just prior to the financial crisis, it is gradually recovering from the nadir reached in 2016 with most of the building happening in the north as the chart below shows

In Porto, both local and foreign buyers have been willing to pay higher prices even as new supply becomes available showing the increasing popularity of that city.

In Lisbon, foreign buyers have paid about the same price while local buyers have steadily being paying more

In the Algarve, constrained supply has led to more dramatic increases in prices for both local and foreign buyers

Want to see more local data? Use our free interactive map to explore the property market in Portugal.