Portugal’s booming real estate market is witnessing a noticeable shift: more families are purchasing homes with cash, forgoing traditional bank loans. While mortgages are still used for about half of all property purchases, the trend of buying homes outright—without resorting to credit—is clearly growing.
Why Are More People Buying Homes With Cash in Portugal?
According to the Association of Real Estate Professionals and Companies (APEMIP), one significant reason behind this phenomenon is the strong appreciation of property values. Many Portuguese homeowners are cashing in by selling their existing homes at higher prices and using the equity to upgrade or downsize, often eliminating the need for bank financing.
A recent report by Público also highlights changes in Portuguese housing law. The “Mais Habitação” (More Housing) package, implemented at the start of last year, now makes it possible to finalize a property sale without a license of use. As a result, there has been a noticeable rise in listings for homes lacking this license—properties that cannot typically be purchased with traditional credit. While such transactions are still relatively rare, they do add to the growing number of homes bought in cash.
Mortgages Remain Popular, But Cash Buys Are on the Rise
Despite this emerging trend, taking out a mortgage is still common—recent data from the Bank of Portugal shows that around half of all properties are still acquired with housing credit. The uptick in cash purchases may be more pronounced for families who already own property and are leveraging rising prices, rather than for first-time buyers.
What This Means for the Portuguese Real Estate Market
The increase in cash home purchases shows how Portugal’s evolving property market is adapting to higher prices and regulatory changes. For some families, increased equity from rising home values is offering greater financial flexibility. At the same time, the market remains accessible for those relying on mortgages, demonstrating a balance between traditional financing and new trends.
Key Takeaways:
- More families are buying homes outright, without using mortgages.
- Rising home values enable sellers to use equity for cash purchases.
- Legal changes make it easier to buy homes without a usage license, although such transactions are still a small segment.
- About 50% of properties are still acquired with bank financing.
Looking Ahead
Experts expect this trend to continue as long as house prices remain high and legal frameworks support alternative purchasing models. Buyers should weigh the pros and cons of both payment options and keep a close eye on market movements in Portugal’s dynamic property landscape.
