What about new homes in Portugal?

Against the backdrop of a global pandemic, the new home market is slowly but surely on its way up.
The new home market has suffered from the pandemic, that's for sure. The housing supply has only increased by 1% between 2011 and 2021 and the demand is much higher than the supply so that we are still talking about a shortage of new houses. Construction licenses are more difficult to obtain, building is more expensive (shortage of materials, labor, increase in the price of raw materials...). A Priori nothing is going well, however...
The number of building permits granted has risen between 2020 and 2021. INE notes an increase of 29.5% in the second quarter of 2021 compared to Q2 2020 and more than 6 000 new constructions were authorized in Portugal between July and September 2021. This is 0.9% more than in the same period in 2020.

In the first half of 2021, 11 765 permit applications for residential projects were filed for a total of 27 600 new homes. Compared to the first half of 2019, this represents a 20% rise. More than half of the projects involve the construction of buildings and apartments (57% or 15 800 units). Again, this represents an increase of 12% compared to the first half of 2019 (source: Confidential Imobiliario).

The number of completed buildings is also up 5.5% between the third quarters of 2020 and 2021.

The pandemic has created new expectations among buyers who want to feel comfortable in their homes. It has pushed builders to review the plans of future homes: larger outdoor spaces (balconies, patios, terraces), areas dedicated to teleworking (offices, co-working spaces...). Numerous projects of residential areas and resorts with individual houses are being built and the apartments are becoming more spacious.

Real estate market in Portugal

Since 2021, the Portuguese tax system is less lenient towards non-habitual residents (settled in Portugal since January 2021), whose pensions received abroad are now taxed at 10%. The prices of existing and new homes have also increased by 86.5% between 2010 and 2020 according to a study by Money.co.uk. However, the country remains attractive.

Market prices (existing and new homes) are still lower than in France and Spain. The cost of living is about 25% more affordable than in France. The country offers an incomparable softness of life and a rate of sunshine that makes you dream. The Algarve has even been elected for the eighth time as "Europe's Leading Beach Destination" at the World Travel Awards in 2021.

Foreigners are more present than ever in the Portuguese real estate market. According to the "Living Destination" study published by the JLL consultancy in October 2021, the share of foreigners who have purchased a property in Portugal has risen from 5% in 2012 to 11% in 2020. The country is still attractive and offers great living prospects.