House prices in the European Union (EU) grew again last year after a fall in 2023 and Portugal recorded the third largest climb among the Member States in the last quarter of 2024.
In spring economic forecasts released Monday, the highlighting the trend of increased real estate prices, noting that “after falling in the second and third quarters of 2023, the prices of real estate rose again in 2024”.
“Price recovery was accompanied by a recovery in the transactions, for a level comparable to the registered years in the pre-pound years,” says Brussels, adding that in the fourth quarter of 2024, nominal prices of houses in the EU were 4.9% higher than the previous year, surpassing the peak of mid-2022.
In real terms, the increase in prices was more modest, but still set at 2.1% throughout the year.
Among the countries, the magnitude of the increase varied considerably, and Bulgaria, Hungary, Portugal, Spain, the Baixes, Poland and Croatia recorded annual growth rates over 10% in the fourth quarter of 2024, the commission highlights.
Portugal was thus the EU country with the third highest annual growth rate of houses prices at the end of last year, of 11.6%.
The European Commission also points out that real estate buyers now have to deal with high prices compared to their indebtedness, given that after the pandemic, the relationship between real estate prices and the indebtedness capacity of families (which can be considered an accessibility indicator) “has increased markedly in the EU”.
In most EU countries, the increase in the actual prices of houses has surpassed the indebtedness of families in the last five years, “highlighting the growing difficulties of families in acquiring housing through credit.”
In Portugal, the indebtedness of families, adjusted to inflation, retreated by about 25% but the prices of houses rose, between 2019 and 2024.
Despite this scenario, Brussels predicts that the EU family’s indebtedness capacity improves by 2025 and 2026, “mainly driven by the positive contributions of families’ income – as real wages are expected to increase 1.6% this year and 1.1% in 2026”.
Housing interest rate drops for the 15th month in April to 3.663%
The implicit interest rate on housing credit retreated in April for the 15th consecutive month, to 3.663%, the lowest amount since June 2023 and 7.2 points base than in March, IA has announced on Monday.
“The interest rate implicit in housing credit descended to 3.663%, lower 7.2 points based on the one registered in the previous month, accumulating a reduction of 99.4 base points from the maximum reached in January 2024 (4.657%),” says the National Statistics Institute (INE).
In contracts entered into in the last three months, the interest rate rose from 3.048% in March to 3.060% in April, registering a monthly increase 1.2 base points, but accumulating a decrease of 132.0 base points from October 2023.
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