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Porto Had the Highest Increase in Housing Starts at the End of 2020

5 May 2021 – Ana Custódio

Porto registered the highest year-on-year growth among the most populated municipalities of Portugal during the fourth quarter of 2020.

In the last three months of the year, the average price of homes in Portugal reached €1,188/m2, a year-on-year increase of 7.8%.

According to the National Statistics Institute (INE), thirteen sub-regions experienced price declines, including the Autonomous Region of Madeira (-8.5%) and the Metropolitan Area of Lisbon (-1.0%). Considering just the 24 municipalities with more than 100,000 inhabitants, Porto reported the highest year-on-year increase (+21.2%) during the fourth quarter of 2020.

The relationship between the prices given in bank valuations within mortgage applications and housing prices suggests lower relative valuations in municipalities with average prices above €960/m2.

In the fourth quarter of 2020, the median price of homes stood at €1,188/m2, an increase of 1.7% q-o-q and 7.8% y-o-y. The pace of increases ticked up slightly q-o-q, rising from 7.6% in 3Q20 to 7.8% for 4Q20, interrupting the deceleration seen in the two previous quarters. The three sub-regions with the highest prices – Algarve (€1,809/m2), Lisbon Metropolitan Area (€1,638/m2) and the Porto Metropolitan Area (€1,288/m2) – reported year-on-year increases of 10.1%, 9.6% and 14.7%, respectively – higher than the average for Portugal (+7.8%).

The Metropolitan Area of Porto (+14.7%) with the highest year-on-year growth, and the Alto Alentejo (€433/m2), with the lowest average sales price, both stand out.

The acceleration in housing prices during the fourth quarter of 2020 was higher than average in eight municipalities (+0.2%) and was most pronounced in Amadora (+6.5%), Matosinhos (+4.5%), Cascais and Braga (both with +4%). Porto registered the highest year-on-year rate of change (+21.2%) in the fourth quarter. In the case of the municipality of Lisbon, housing prices held steady (0%).

Translation: Richard D. K. Turner