The Portuguese are seeking refuge: wealth doubles in 10 years

Real estate is considered a financial safe haven for investors and families, especially during times of crisis. There is no doubt about this, as the wealth of Portuguese families invested in housing has been steadily increasing since 2015, reaching an average of 179,000 euros per family in the second quarter of 2023. Overall, the wealth of Portuguese families related to real estate has grown by 68% over the past ten years and has the highest value recorded by the European Central Bank (ECB) since 2010. This is why real estate constitutes a major part of the net worth of families living in Portugal.

After the last financial crisis, household wealth in the housing sector decreased quarter by quarter due to rising defaults on bank obligations and falling property values. However, families quickly returned to trusting real estate and housing. From the end of 2015 to mid-2023, household wealth in the housing sector steadily grew, except for the quarter immediately following the onset of the pandemic, as recent data from the ECB shows. The significant increase in housing wealth led to an average housing wealth of 179,000 euros per household in the second quarter of 2023, which is 5% higher than the same period last year and 31% higher than the figures from 2019 (pre-pandemic).

If we go back ten years, we will notice that families have become 68% wealthier in terms of housing.

Housing accounts for 66% of the total wealth of Portuguese and Europeans.

The gradual increase in real estate prices also supports the growth of families' net worth year after year, which averaged 271,000 euros in spring 2023. Specifically, housing accounts for more than two-thirds of the net worth of Portuguese people - the largest share among all categories, followed by deposits.

In Europe, it can also be noted that real estate is where families invest the most of their wealth, as it accounts for about 66% of the net worth of Europeans. The highest wealth in real estate is accumulated by the Swiss and the Dutch (around 80%). At the same time, Italy and Latvia invest the least in this segment (54% and 45% respectively).

However, not everything is the same in the European space: the average net wealth of Portuguese families is the sixth lowest in the eurozone, only ahead of Estonia, Slovakia, Greece, Lithuania, and Latvia. Although family wealth in Portugal is growing - and even above the euro average - this figure is still 30% lower than the average in the eurozone, as the same newspaper points out. The highest average wealth is among Luxembourgers (€1,451,000), followed by the Irish and Belgians (over €560,000).