3rd August 2022
Multi-Family Living in Portugal


A recent report from international real estate consultancy Savills highlights a new trend in family living, which is  now attracting the attention of investors looking for new business sectors.


In 2021, say Savills, the Multifamily segment totalled  €92.3 Bn of property investment in Europe,  which represents a very sharp increase compared to the average of the last five years.

The growing consolidation of the Multifamily sector, based on strong economic and demographic fundamentals, has started to offset the  post -pandemic uncertainties now overshadowing the more traditional office and retail markets.

In some European markets, the Multifamily property  sector has surpassed investment volumes in the office sector. In 2021 the market share in Multifamily reached 54% in Denmark, 46% in Germany, 39% in Ireland, 35% in Sweden and 32% in Finland.

The coming years  present property investors with several challenges. In the midst of high inflation and the uncertainties caused by the energy crisis, the demand for stable assets and the need to find new, profitable projects will be acute.

Added to these challenges are other factors that could act as disruptors and delay project delivery, such as labour shortages, continuously rising construction costs and supply chain failures.

In Portugal, since 2014, the increase in house prices has run far ahead of the growth rate of family income. This situation is compounded by the growing difficulties for the Portuguese  in accessing bank credit and mortgages, aggravated very recently by a reduction in the typical loan terms and the predictable rise in interest rates.

Ironically, these conditions mean Portugal is ripe for the Multifamily sector to become an attractive segment in the Portuguese market. Going forward, it will no longer be only a small percentage of young people, or new couples starting life together, or highly mobile professionals, who will turn to the rental market in Portugal as a more convenient housing solution. It will be more about families forced into the rental market, now that their chances of access to mortgage loans are increasingly limited.

But the development of Multifamily projects in Portugal faces several challenges that require, above all, the speeding up of licensing processes, so as not to increase the final cost of the project, given the already high construction costs.

The current supply in Portugal’s rental market is limited, with high prices compared to the quality of the properties. The entry of new stock, 100% built from scratch for the rental market, should increase  supply but it will also raise the quality and increase the value of the properties.

This would mean the sector becomes more specialised, more operationalised, and more geared to respond to the current needs of the occupants, changing the focus from the owner to the tenant, similar to what already happens in other European countries, namely Germany.

Only 26% of the Portuguese population live in rented houses.  Within the European Union, Portuguese families are among the most indebted when buying a house, with more than 40% of their monthly income allocated to mortgage payments.  For these reasons, the  Multifamily sector could become a key segment in Portugal in the future.

In a sign of things to come, Lisbon City Council, either via 100% private initiatives or as part of their Controlled Cost Housing Programme, already has a confirmed 10,000 new dwellings in the pipeline.


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