The Housing Price Index grew 17.7% compared to the same period last year, according to data released by the National Institute of Statistics (INE). This is a new record for the third consecutive quarter.

Compared to the previous quarter, this is an increase of 0.5 percentage points. The price increase between July and September was mainly noted in existing houses (19.1%) and, to a lesser extent, in new houses (14.1%).

House transactions also increased, although at a slower pace. In the third quarter of this year, more than 40,000 homes (precisely 42,481 residences) were sold for a cumulative value of €10.5 billion, representing an annual increase of 3.8% and 16%, respectively. Even so, this is a slowdown compared to the previous quarter.

In total, more than 37,000 homes were sold in those three months. “37,507 dwellings (88.3% of the total) were sold to buyers belonging to the institutional sector of families, for a value of 9.2 billion euros (87.5% of the total). In the same period, buyers with a tax domicile outside the national territory acquired 2,219 dwellings, representing a year-on-year reduction of 16.4%,” reads the INE (National Institute of Statistics) report.

Overvalued homes

The data is released exactly one week after the European Commission concluded that Portugal has the most overvalued homes in the European Union. The average overvaluation is 25%, placing the country ahead of markets such as Sweden, Austria, or Latvia. On the same day, Brussels presented the European Affordable Housing Plan, which involves an investment of €150 billion per year to create 650,000 new homes annually over the next decade across all member states.

In the third quarter, the average annual rate of change in the house price index was 15.7%, 1.9 percentage points higher than the growth recorded in the previous three months, constituting a new high.

Of the €10.5 billion recorded in transactions between July and September, the value of 'old' houses reached €7.8 billion, corresponding to an increase of 21.1% compared to the same quarter of 2024, while for new houses it was €2.7 billion (up 3.3% year-on-year). Also noteworthy is the fact that the Portuguese continue to buy. During this period, home purchases by those with tax domicile in Portugal grew by 5.2% year-on-year, to a total of 40,262 units.

“Among transactions relating to buyers with tax domicile outside the national territory, the European Union category, with a total of 1,149 transactions, registered an annual variation rate of -16.5%, while in the category of tax domicile in other countries, a reduction in the number of sales of 16.3% was observed, corresponding to 1,070 units,” concludes the statistics agency.