Younger people are taking out mortgages less often than the previous generation.

The conditions for access to home credit improved in the second half of the 1980s due to low interest rates and the introduction of bank-financed home purchase incentive policies. This improved access to mortgage credit primarily allowed the 1977-1986 generation to have the highest percentage of young home loan holders. However, the situation changed for the next generation: the percentage of young adults born between 1987 and 1996 with a mortgage loan fell.

There are more opportunities for home loans.

About 40 years ago, our country began to experience "important changes that made access to credit easier for many families," notes the Central Bank of Portugal (BdP) in''s publication last week. There was liberalization of the financial system; a sharp reduction in interest rates to eurozone levels; and the introduction of policies to encourage the purchase of a home using bank credit, for example through soft loans.

The improved access to mortgage credit in the 1980s "primarily helped generations born after 1966 (and those reaching the age of 25 after 1990)". BdP data shows that almost 70% of homeowners born between 1967 and 1976 took out a mortgage at a young age (between 25 and 34). But even the most owners with a home loan in the 25 to 34 age group were among the generation born between 1977 and 1986 - more than 80%.

"According to census data'. 'population, 14% of homeowner households had a mortgage to buy a house in 1981. That percentage more than doubled by 2001 and peaked at 43% in 2011," emphasizes the same publication.

The decline of young homeowners

The boom in young owners with mortgages has diminished among the next generation: about 70% of owners born between 1987 and 1996 took out mortgages to buy a home between the ages of 25 and 34 (they have bought homes since 2012).

'Young families have been particularly affected by the rise''unemployment between 2000 and 2014 due to weak economic growth in the early 2000s and the sovereign debt crisis. During this period, the percentage of renters in the younger age groups increased significantly, while it continued to decline in the older age groups,' notes BdP." Read all the latest real estate data and reports in our daily and weekly newsletters.

Home ownership trends

Younger homeowners have become less likely to own their own homes than previous generations. The study 'Housing in Portugal over the last 40 years', included in October's Economic Bulletin, shows that the percentage of homeowners aged between 25 and 34 in the generation born between 1977 and 1986 was''61%, and it dropped to 42% in the 1987-1996 generation.

At the same time, the study indicates that "the percentage of owners less than 25 years old dropped to less than 35% in generations born after 1986, which compares with values between 45% and 55% in generations born in the previous three decades. "

The group born between 1967 and 1976 "is the one in which families became homeowners the earliest, with about 70% of families owning between the ages of 25 and 34, that is, around 2001. "

42% of young owners in the most recent generation (1987-1996) is a similar proportion to the proportion of young owners for those born between 1947 and 1956 (42%). Regarding families with their own home, regardless of age, in 1981, 57% of families living in Portugal,''had their own living quarters. In 1991, the figure was 65 percent and reached 76 percent in 2001.

BdP attributes the rise in the owner-occupancy rate again to modernizing financial markets and falling interest rates, as well as the lack of an active rental housing market. And he supports his argument with data: since 2001, the owner-occupation rate has fallen slightly (73% in 2011 and 70% in 2021), which is also attributed to public measures that BdP believes have stimulated renting, especially since 2011.