Portugal news - Portugal's new real-estate law reduces the price of new homes in metropolitan areas and district capitals by 20%.
According to the INE, the current average price per square meter in new homes is 50% higher than that of used housing. “Being able to buy new homes with a maximum price limit of 20% below current market prices not only prevents but also stops speculation,” says the Deputy Minister for Territorial Cohesion, Castro Almeida.
Portugal's new real estate law that amends the Legal Framework for Land Management Instruments (RJIGT) and which will allow local authorities to release land for the construction of houses for the middle class at moderate prices will have an anti-speculative effect on the market: in addition to the price containment that the increase in supply always causes, the maximum value per square meter of future houses in the metropolitan areas of Lisbon and Porto and in the district capitals will drop substantially compared to current market values.
“The practical result of this law is that it will allow for an average 20% reduction in housing prices in the country’s main urban areas,” says Castro Almeida.
An analysis of the values of deeds for new homes registered on the Confidencial Imobiliário platform in 2024 confirms this. The average values per square meter of homes sold in the municipalities with the highest demand – Greater Porto, Greater Lisbon and district capitals – are noticeably higher than the maximum limit imposed by Decree-Law 117/2024.
In addition to Lisbon or Cascais, where the difference reaches 45% and 48%, there are relevant cities such as Sintra (36%) Viana do Castelo (34%), Gaia (32%), Braga (28%), Vila do Conde (27%), Viseu and Setúbal (26%), Barreiro (24%), Oeiras (23%), Aveiro (23%) or Coimbra (21%), where the limit imposed by the new law is considerably below the prices currently practiced on the market.
According to the most recent data from the Consumer Price Index (CPI) of the National Institute of Statistics, in the third quarter of 2024 the average value per square meter of new housing was 50% higher than the average sale value of used housing – and all houses that will be built on rural land that local authorities transform into construction areas will be completely new.
“Being able to buy new homes where the maximum price limit is 20% below current market prices not only prevents but also stops speculation”, says Portugal's Deputy Minister for Territorial Cohesion.