Estate agency Century 21 paints dire portrait of home affordability in Portugal

Lisbon, Porto and Faro are now so expensive to buy a residential property that it is almost impossible to buy a property without a mortgage that eats up at least 50% on average income according to the latest Century 21 Portugal report ‘Accessibility to Housing 2026’

The study focuses on access to housing for those looking for their first home (families and young people without previous real estate assets that can serve as leverage) in their city – precisely the segment most vulnerable to price escalation and the scarcity of affordable supply.

In Portugal’s interior, seven regional cities are still accessible requiring 33% or less of average monthly income to pay for a mortgage on a home, but upward pressure is spreading.

And renting a property has also reached a critical price with renting a 90m2 property now out of reach in six regional capitals requiring between 34% and 50% of income. Only two cities in the interior offered rents at below 33% of income.

Metropolitan areas and the Algarve are particularly costly, while only one-third (nine out of 26 towns in the Lisbon and Porto Metropolitan Areas and the Algarve being accessible (less than 50% of properties), but all of them requiring a high proportion of salaries (more than 33%). When it comes to renting, all are unaffordable (more than 50% of salary income).

In large urban areas, a financially sustainable mortgage (less than 33% of salary) provides a space of 35-50m2 – less than a half of the average area of 90m2.

And the housing market seems completely out of sync with reality with only 48% of supply within the reach of 77% of families (up to €330,000m2), displaying a clear structural imbalance.

Portuguese salaries are only making the crisis worse, with purchasing power 30% below that of the EU average, so the housing crisis is even deeper than prices suggest.

“n 2022, there were 16 district capitals where buying a home was financially sustainable for an average local family. Although this number remains high (+15), the geography of accessibility has changed radically.

Lisbon, Porto and Faro have completely disappeared from the map of affordable purchases for families in their respective cities. “This means that in three years, housing has become an insurmountable challenge in the main district capitals for those buying their first home in their city,” says Ricardo Sousa, CEO of CENTURY 21 Portugal.

Image: Ricardo Sousa, CEO Century 21 Portugal. Source: Blog Century 21