Portugal Housing Market Update: House Price Slowdown Confirmed

The National Statistics Institute (INE) reports a 2.8% annual inflation rate in June, marking a 0.3 p.p. decrease from the previous month in the Portugal housing market.

The latest data released by the National Institute of Statistics (INE) reveals that the year-on-year variation in the Consumer Price Index (IPC) was 2.8% in June 2024, a decrease of 0.3 percentage points from the previous month in the Portugal housing market. This figure aligns with the initial estimate released on June 28th. The underlying inflation indicator, which excludes unprocessed food and energy products, saw a slight upward revision to 2.4% in June, compared to 2.7% in May.

The index for energy products confirmed a 9.4% variation in June, up from 7.8% in May, while the index for unprocessed food products slowed to 1.8% from 2.5% the previous month. The overall IPC remained stable in monthly terms, with no variation recorded in June. The average variation over the last 12 months stood at 2.5%, a slight decrease from the previous period.

Excluding unprocessed food and energy products, the 12-month average rate of change was 3.0%, with a monthly decrease of -0.2%. The Portuguese Harmonized Index of Consumer Prices (HIPC) registered a year-on-year variation of 3.1%, in line with expectations. The slowdown in inflation was attributed to a decrease in hotel prices, following a cultural event in Lisbon.

The HIPC without unprocessed food and energy products was 2.7% in June, lower than the Euro area average of 2.8%. The monthly variation for HIPC was -0.3%, with an average 12-month variation of 3.2%. These figures indicate a moderation in inflationary pressures in Portugal.

The latest data from INE highlights a slight moderation in inflationary pressures in Portugal, driven by lower prices in the hotel sector. The overall economic outlook remains stable, with inflation rates in line with expectations.