Majority of Portuguese Homeowners Have Paid Off Their Homes, Remaining 23% Continue with Mortgage Payments
In a recent study conducted by Consumer Choice and reported by idealista, the current trends and challenges in home ownership for Portuguese individuals aged 18 and over have been highlighted, painting a picture of a dynamic yet challenging market.
**Trends:**
The study revealed a strong surge in residential property sales, with 156,325 dwellings sold in 2024, marking a 14.5% increase year-on-year. This growth can be attributed to lower borrowing costs and government incentives such as the IMT Jovem law, which exempts buyers up to 35 years old from certain taxes on their first home purchase.
Domestic buyers dominate the market, accounting for 93.7% of purchases, indicating high local demand with a 16.2% increase in domestic acquisitions compared to 2023. Mortgage interest rates have also fallen substantially from 4.65% in 2023 to between 2.5% and 3.8% in 2025, improving affordability for buyers able to secure financing.
Despite a seller’s market with limited property inventory and strong competition, young Portuguese buyers continue actively seeking homes, leveraging favourable mortgage conditions where possible. The majority of consumers prefer houses (67%), while only 25% prefer apartments.
**Challenges:**
The most pressing challenge is affordability. Property prices have soared, with a national price average of €2,735 per square meter and annual price growth hitting 15.8% in 2025—the highest in nearly two decades. Local wages and rents have not kept pace with this price escalation, resulting in extended price-to-income ratios exceeding 12 to 15 years, creating a severe affordability crisis for younger buyers.
The inventory shortage exacerbates competition and pushes prices higher, especially in major urban centers where infrastructure projects and economic stability further increase property values. Although tax incentives like IMT Jovem help reduce upfront costs for younger buyers, the fundamental gap between income growth and property price increases remains a significant barrier to home ownership for many young Portuguese adults.
**Key Findings:**
- 40% of the respondents do not currently intend to acquire any type of housing. - Of the 31% of participants who do not own their own home, 9% plan to buy a property in the next 12 months, and 18% estimate they will buy a property within one to three years. - Less common situations include living with friends or colleagues (2%) and sharing a house with strangers (1%). - The majority of those interviewed value the stability of home ownership. - 13% of those interviewed cohabit with children, while 17% live with parents or other family members. - 33% of homeowners took more than three years to save for a down payment, with 18% taking between one and three years, and 9% saving in less than a year.
In conclusion, while Portuguese individuals aged 18+ benefit from lower mortgage rates, tax incentives, and a dynamic market with growing sales, the key challenge remains the affordability gap driven by rapid price increases far outstripping income and rent growth in 2025. Young buyers face a tough market where securing home ownership involves navigating high prices and stiff competition despite policy support measures.
- The housing-market in Portugal is dynamic, with a significant rise in residential property sales in 2024, following lower borrowing costs and government incentives like the IMT Jovem law.
- The study revealed that mortgage interest rates have fallen, improving affordability for buyers who can secure financing, while domestic buyers accounted for 93.7% of purchases, indicating a high local demand.
- Despite a challenging market with limited property inventory and high competition, young Portuguese buyers actively seek homes, with 67% preferring houses over apartments.
- However, the affordability crisis remains a pressing issue, as property prices have soared, leading to extended price-to-income ratios and creating a severe affordability problem for younger buyers.
