Buying a house in Portugal is an increasing challenge and from April onwards it will be even more difficult
In Portugal, you buy a house later and later. If you have had a job for 3 years for years, access without great difficulties, nowadays, to buy your first home is already quite safe.
There are several factors that contribute to this change.
Why do young people buy a house in Portugal later and later?
House prices have gone up (there is no forecast of a decline), young adults cannot find stable employment and their incomes are low.
All this added up makes the purchase of the first home happen later and later. And they are forced to live in rented houses for years, with many equally high rents.
Nuno Rico, economist and mortgage loan specialist at Deco Proteste, points out three main reasons why young people are unable to buy a home in Portugal:
- low yields;
- precarious employment relationships;
- Guaranteed real estate market prices.
“The socioeconomic context that we have been experiencing in recent decades has made it very difficult for young people to access housing credit”, he begins by saying.
In an interview with SIC Notícias, Nuno Rico highlights that the income of younger people is “relatively lower” compared to the income of “a little older people”.
“Today we have a youth much more qualified population than we had a few years, but that did not translate into a translation much of the translators“, points out.
“Nearly Impossible Equation”
There is also, as already mentioned, an important factor that makes it difficult to buy a house: the prices set in the real estate market.
The economist says that Portugal has average prices per mtwo most of Europe and the lowest averages.
“We have an almost impossible one here. How’s that with our last eight eight years? In large urban centers, I would say that it is almost impossible to buy most young home“, he says.
The new mortgage loan terms
In addition to these factors, there is also a new variant that makes accounts even more difficult for many young people and is related to the term of mortgage loans.
In July 018, the Available Bank of Portugal (BPD2) had a problem with the granting of loans for housing and consumption to avoid situations of default and comparison with income.
In this, the supervisor decided several times, including the convergence of the maximum term of 40 years to a convergence average of 30 years in new housing credit contracts which is the age of the customers.
AN The measure takes effect on April 1.
“The maximum maturity of the credits must be 40 years, for borrowers aged less than or equal to 30 years. A 37-year term for borrowers over the age of 30 and less than or equal to 35 years, and a maturity of 35 years for borrowers over the age of 35. Bank of Portugal statement.
The mortgage loan specialist, Nuno Rico, considers that this change in terms “is an increase in difficulties”.
what young people say
SIC Notícias spoke to young people between the ages of 30 and 33 who have not yet bought a house.
Ana Sousa, 32, social media manager
Ana buy and her boyfriend have been looking for a house for approximately two years. Both employment relationships are stable and income is reasonable. In this specific case, she still cannot buy a house because of the prices.
Living in a rented T1, in Lisbon, it is in this municipality that they intend to buy a house, not only because they are already used to living in the capital, but also because it is where they work.
However, the new deadlines that come into force in April have already made the couple consider whether they really want to stay in Lisbon or in other areas, on the outskirts of the capital.
“Currently, buying a house in Lisbon seems like a dream, a mirage“, says the social media manager in statements to SIC Notícias.
The fact that she still doesn’t have to buy makes Ana leave some life projects.
“A person cannot even think about having children living in a T1”, he laments.
“Age will pass and with these changes in terms even worse. Time, which was already scarce for those who want to start a family, has become even longer. And the it’s bigger.”
“We are everyone waiting for the housing bubble to burstbut honestly I think this will only happen for a long time,” he says.
Ana confesses that the new rules of the Bank of Portugal made the search for a house more intense. “Now we have to make a decision in a short space of time: either we throw the towel on the floor, or buy one in an area we don’t like very much”.
Duarte Silva, 30 years old, manager of innovation and strategy projects
Duarte sought home for a year and a half. The price of houses in Lisbon made him give up, since he didn’t even have the 10% of the value of real estate that is necessary for those who use mortgage loans.
Despite having a job where he could earn good income, it was not enough to invest in Portugal. Duarte ended up emigrate to Switzerland in November 2021.
“Buying a house here is not in the plans. I don’t know how long I’ll stay, but the idea was Gather some capital that will allow me to invest in Portugal“, bill.
The innovation and strategy project manager not welcomed the news of the new deadlines of housing credit.
“This obligation is mandatory for a higher installment and will probably also represent a higher effort rate with the banks”, he tells SIC Notícias.
Duarte had hoped that like the BdP they would not advance.
Rita Ramos, 33 years old, pastry chef
The first time Rita and her husband looked for a house to buy was 10 years ago. As they had only recently entered the job market, savings were scarce. And, at the time, the banks asked for a guarantor.
“The only people who could help us were our grandparents, but they were no longer old enough to be guarantors of news”, he begins by telling SIC.
Time passed, employment relationships did not improve and The couple lives to this day in a rented house with their four children.aged between three and eleven years.
“I couldn’t choose where I live, I have to live far from schools and without a driver’s license it’s very difficult to get around with the affirmatives”.
Rita is self-employed and her salary varies from month to month, as it depends on the number of orders she receives. The husband receives the minimum wage.
“Between paying water, electricity, gas, food and rent, which are 500 euros, we don’t have much left. I would love to have my house, but unfortunately I still haven’t been able to due to this situation”, he says.
Uncertainty about the future significantly affects family and family stability
“I have freedom to the house that is available on the freedom market and, in our case, although we live in a T3, it is a small house for six people”, he says.
Since Rita is 33 years old, if she were to apply for a home loan today, she would have to pay it off in a maximum of 37 years.
“These three years will make all the difference. It is a measure that affects me in the sense that I would have to pay a higher installment,” she says.
Are you thinking about buying a house? These tips are for you
Economist Nuno Rico lists some tips for those who want to buy a house. And attention because these advices are directed to all songs.
– Check if buying the property is the best option
That is, if you are in a situation of little stability in terms of work and if the intention is not to remain in that city/county for the next five or ten years, the purchase should not be the best option, especially “taking into account the very high prices”. quality of the property”, he points out.
– Check income stability
Nuno Rico recalled that a mortgage loan is a commitment of approximately 30 years, which, in the case of the youngest, can go up to 40 years.
In this sense, it considers it important that potential buyers make an assessment of their long-term earnings.
“They should consider the following: if I don’t fluctuate professional stability, or if there is a fluctuation in income, or even if interest rates rise significantly, what impact will this have on any family budget?”
The economist considers that people should always be prepared for an eventual situation, whether they want to make an income or fulfill the tasks that must take place.
– Reduce the time to pay the credit, so that you do not exceed the retirement age
How? Instead of making a credit agreement for 40 years, try to do a 30 year one, as long as you have a 30 year installment.
To avoid difficulties in the future, Nuno Rico considers it essential that the credit does not “exceed the retirement forecast”because at that time the income suffered a sudden.
Otherwise, “we will be with consumers for 10 years with a charge for a property that no longer has the value it had at the time”.
“We currently have approx. 40% of mortgage loan contracts after 70 years of age, some of them even reaching 80 years of age“, he finishes.