In March, Portugal’s home loan rose 5.4% year-on-year, reaching €104.4 billion, the highest growth rate since 2008, reports the Bank of Portugal.
In a notable development for the Portuguese housing market, the stock of housing loans has risen by 5.4% year-on-year as of March, reaching a total of €104.404 billion. This figure marks the highest annual rate of change since September 2008, according to data released by the Bank of Portugal (BdP).
Year-on-Year Growth and Current Trends
As of the end of March, the total stock of housing loans increased by €908 million compared to February, reflecting a sustained upward trajectory in the mortgage sector. The year-on-year growth rate of 5.4% indicates a robust recovery in the housing loan market, continuing the acceleration observed in recent months.
The number of mortgage debtors has also seen an uptick. By the end of March, there were approximately 1.96 million individuals holding housing loans, representing an increase of 2,476 debtors from February. However, this figure is nearly 13,000 lower than the number of debtors recorded in the same month the previous year, suggesting a slight contraction in the overall number of mortgage holders.
Broader Loan Trends
In addition to housing loans, the overall loans to households have experienced a positive annual rate of change of 5.8%, amounting to €135.156 billion—an increase of €1.126 billion since February. This growth is indicative of a broader trend in consumer borrowing, with consumer loans and other purposes alone witnessing a 7.1% increase, totaling €30.752 billion.
The consumption segment has also shown signs of acceleration, with an increase from 7.0% in February to 7.3% in March. Loans for other purposes reached an annual growth rate of 6.6%, marking the highest annual growth since July 2008.
At the end of March, the breakdown of personal loans included €12.815 billion in personal loans, €8.541 billion in car loans, and €3.217 billion in credit card debt, reflecting annual rates of change of 7.6%, 10.1%, and 9.1%, respectively.
Corporate Credit Landscape
Turning to the corporate credit sector, the stock of credit to companies stood at €72.666 billion at the end of March, reflecting a modest increase of €65 million from February and an annual growth rate of 1.4%.
Micro and large enterprises maintained positive annual rates of change, with growth rates of 9.7% and 1.1%, respectively. In contrast, small and medium-sized enterprises (SMEs) continued to face challenges, recording negative growth rates of -0.6% and -4.4%, respectively.
Certain sectors have also shown varied performance in terms of credit growth. The industries and electricity sector experienced a negative annual rate of change of -1.1%, while the trade, transport, and accommodation sectors saw a slight decline of -0.1%. Conversely, the construction and real estate sector reported a positive annual growth rate of 5.8%, indicating a resilient demand for credit in these areas.
The latest data from the Bank of Portugal highlights a significant rebound in the housing loan market, with a notable year-on-year growth rate that reflects increased consumer confidence and demand for housing. While the overall landscape for loans to households remains positive, challenges persist for small and medium-sized enterprises, particularly in certain sectors.
As the Portuguese economy continues to navigate the post-pandemic landscape, the trends observed in Portugal’s home loan and consumer credit will be crucial for understanding the broader economic recovery and the future of the Portugal’s real estate market. Stakeholders in the financial and real estate sectors will need to remain vigilant to these trends as they adapt to the evolving economic environment.
