Over the past decade, residential real estate in the country has increased in price by 86.5%, putting Portugal in eighth place in the world.
What happened? According to a study by money.co.uk, home prices in Portugal have soared 86.5 percent in the past decade, putting the country in eighth place in the world for the relevant indicator.
A square meter of housing in Portugal cost €1,430 in 2010 and €2,670 in 2020, an increase of 86.5%. At the same time, the average wage in the country decreased by 1.3% and inflation rose by 1.06%.
How was it counted? In the study, analysts looked at how the average price of real estate in OECD countries has changed over the past 10 years and compared it to the difference in average wages and inflation over the same period. Thus, they found out in which countries the value of property exceeds income.
Leaders of the ranking. The largest increase in property prices over the past decade was seen in Israel, where the average price rose by 345.7%. In 2010, the price of real estate in that country was €1,810 per square meter, and now it is €8,070. However, the average wage rose by only 17.5% over the same period, while the inflation rate was 0.92%.
Second place went to Switzerland, where property prices have risen by 165.5% since 2010. Switzerland is well known for its high cost of living, which has risen sharply over the past 10 years compared to the average wage (+2.4%). Switzerland is followed by Germany, where real estate prices have risen by 162% in 10 years and wages have risen by 14.2%.
By comparison, according to the study, four countries have actually seen a decline in home prices over the past decade. The biggest drop in prices per square meter (-17.9%) occurred in Greece, but at the same time the average annual wage in the country also fell sharply, by 16.1%.
Solution. Many Portuguese are looking for a solution abroad, in neighboring Spain, where the difference in housing prices can reach 50%. According to the newspaper Expresso, “rising housing prices are forcing the Portuguese to seek housing abroad, because in Spain the cost of real estate is half as much as in Portugal.”
The newspaper gives the example of a house in Chaves in northern Portugal for €120,000, while on the other side of the border in Orense real estate can be bought for only €44,000.
According to Expresso, the Portuguese, who live near the Spanish border, are now increasingly seeking to live in Spain while working in Portugal.
Another example of the difference in housing prices and rents between Iberian neighbors can be seen in the Algarve. At this Portuguese resort, a house can be rented for €600 per month, while abroad in Spain, a similar property can be rented for half that amount. In Spain, you can rent a house with a pool, garden and playground for only € 450 per month, while in Portugal it will be difficult to find a similar house for less than € 650.