Buying or renting housing in Portugal: the level of effort will increase in 2023.

Housing prices for purchase and rent in Portugal continue to rise in 2023. Although the rate of increase in property prices has slowed down in some cities, they are still rising faster than family salaries. As a result, the financial burden of buying or renting a home has increased last year in almost all district capitals in Portugal, according to a study conducted by Idealista.

The labor intensity of renting housing in Portugal has increased by nineteen percentage points, rising from 62% in the fourth quarter of 2022 to 81% in the fourth quarter of 2023. Regarding home purchases, the national labor intensity has increased by 14 percentage points, going from 57% to 71% during this period.

Cities with an increase in the labor intensity of renting housing

• Faru (+29 p.p.)
• Funchal (+15 p.p.)
• Lisbon (+13 p.p.)
• and others

Cities with the highest efforts for renting housing

• Funchal (89%)
• Faro (87%)
• Lisbon (87%)
• and others

Out of the 20 analyzed cities, in Faro, the cost of purchasing housing increased from 69% to 107%, which is the largest increase.

Cities with the most effort to buy a home

• Funchal (113%)
• Faro (107%)
• Lisbon (101%)
• and others

On the other hand, there are cities where you can purchase housing with a level of labor intensity below the recommended level of 33%: Santarém, Beja, Castelo Branco, and others.

Methodology

Labor intensity measures the impact of housing costs on a family's purchasing power. For renting it is calculated as the percentage of annual income allocated to renting and for buying it is calculated as the percentage of annual income allocated to mortgages. Data on housing prices are from Idealista and on family income are from INE.