Buying a house is cheaper than renting in all district capitals except Lisbon, according to the second edition of Century 21 real estate’s “Accessibility to Housing in Portugal” study, released this Friday.
This conclusion is the result of the comparative analysis between the rental and purchase value for a house of 90 square meters, the study showing that in the district capitals the value of an apartment of this size varies between 375,480 euros in Lisbon and 59,040 euros. euros in Guarda, with a national average of 152,159 euros.
Taking into account the indicators of the market value of real estate and interest rates, the repayment terms for the purchase of a house of 90 square meters vary between 208 euros in Guarda and 1,322 euros in Lisbon, followed by Porto, with 881 euros. Apart from these two cities, the value in the others is less than 600 euros and in most district capitals less than 400 euros per month.
On the rental side: “Only in Lisbon, buying 90 m2 entails a higher monthly cost (14%) than renting a house of the same size”, says the Century 21 study, pointing out that in Porto the advantage of buying is also “greatly reduced (-6%)”.
“In all other cities, buying is associated with a monthly amount that is lower than income, and in most cities this difference is as high as -20%,” the same analysis concludes. Portalegre and Bragança are the cities where the acquisition “provides a stronger advantage over the lease, with a payment of about 50% below the rent,” the study reads.
Converted to euros, renting this type of house costs an average of 1,167 euros in Lisbon (1,017 in the respective Metropolitan Area), three times what it costs to rent in Beja.
However, “although buying remains the most economical option – with the exception of Lisbon – there is a clear loss of competitiveness of this option compared to renting in all cities”, refers to the document.
In 2019, the monthly purchase allowance in all cities (excluding Lisbon, Porto and Faro) was 40% to 60% below an income, but in 2022 this difference has narrowed in most cities and the purchase is now between 20% and 30%. % below income.
Using data on household income (which are based on tax returns published by INE) and information on prices and market rents from Confidencial Imobiliário, the study also reveals that between 2019 and 2022 households’ disposable income increased by an average of 9%, while the house prices in Portugal increased by 38%.
A discrepancy that resulted in a “worsening of access to housing” during that period.
According to the study, the net income of families in the different district capitals varies between 1,973 euros in Lisbon and 1,426 euros in Viana do Castelo, with an average of the district capitals at 1,545 euros.
That’s what it’s called buying a house in Lisbon (for the assumed typology) requires “an effort rate of 67%”, while in Porto the effort rate is 50% and in Faro it is 39%.
“With the exception of the capitals and municipalities of the AML [Área Metropolitana de Lisboa]AMP [Área Metropolitana do Porto] and Algarve, in the remaining district capitals this indicator is 30% or less, with most cities placing the acquisition effort at the level of 20%, while 13% in Guarda records the lowest effort rate in the country,” the study said. according to which the effort rate in 15 of the 18 district capitals is lower than recommended (33%).
However, it should be noted that these effort rates recorded in 2022 show a deterioration compared to 2019, when “there were 15 district capitals where buying a 90 m2 house consumed 20% or less of the budget”, and “currently only six are at that level”.
At a time when the European Central Bank (ECB) continues to raise its base rates, the study analyzes the impact on the monthly payment of the rate increase to 5%.
In this scenario, it is concluded that the benefit will register an increase of more than €150 per month in most cities, and more than €200 per month in some cities. Yet “the effort rate is below 40% in 15 of the 18 district capitals, even with forecasts of a 5% rise in interest rates”.
On the other hand, the study shows that only in Lisbon, Porto and Faro and respective metropolitan areas, families would have to buy an apartment with a smaller area in order not to end up with an effort rate of more than 33%, and in some cities (as under other Viseu , Santarém or Leiria) by allocating a third of income to housing loans, you can even buy houses with more than 90 square meters.
The Executive President (CEO) Century 21, Ricardo Sousa, cited in the study, talks about the origins of the disequilibrium in access to housing in Portugal, specifying that “in the metropolitan region of Lisbon, 43% of homes for sale have an average price level of more than 330,000 euros, while only 14% of households will be able to meet that purchase level”.
In the AML and AMP, Ricardo Sousa points out, 55% and 61% of families, respectively, belong to the middle class, while only 33% and 41% (in the same order) of the supply fit the income level of that class.
Source: DN
