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House prices have risen where population has grown the most over the last decade

The cost of buying housing has climbed since 2019 in the 20 municipalities that gained the most inhabitants between 2011 and 2021.

More inhabitants, more expensive houses. Demographics and real estate go hand in hand. The mobilization of families to the cities, towns or villages of Portugal implies the search for a new house to live in, generating new dynamics in real estate business. And this movement creates additional pressure on the residential market in these municipalities that have a structurally scarce offer, leading to an increase in house prices. It is precisely this relationship between demography and housing prices that is very visible in the 20 municipalities where the population grew the most between 2011 and 2021, show data from the National Institute of Statistics (INE) analyzed by idealista/news. As a result, revenues from property sales more than doubled in these municipalities.

Portugal is experiencing a serious demographic problem, characterized by a low birth rate. But the good news is that the arrival of migrants to our country has helped balance the balance. INE data show that the resident population in Portugal grew by 0.26% compared to the previous year, registering 10,421,117 inhabitants in 2021. This was the third consecutive year that there was a population increase in our country.

But compared to 2011, the reality is different: the resident population in Portugal fell by around 2%, having lost 219,112 inhabitants in ten years. And this is a visible reality in almost the entire country. In the North (-2.79%), Center (-4.32%), Alentejo (-6.97%), in the Azores (-4.2%) and in Madeira (-6.36%) there was a loss of resident population in the last decade. Looking at the 308 municipalities, it is clear that the vast majority today have fewer inhabitants. The most worrying cases are those of Barrancos and Nisa, in the interior of the Alentejo, where the population has shrunk by more than 20% in ten years, as well as in Tabuaço and Torre de Moncorvo, in the interior North.

This is not, however, a trend observed throughout the country. Population growth in recent years in Portugal has been uneven. And proof of this is the increase in inhabitants in the Algarve (3.62%) and in Área Metropolitana de Lisboa (1.71%) in 2021 compared to 2011. It is also these regions that have the highest proportion of foreign residents, as shown by the data. from the 2021 Census:

  • 14.53% of the 467,343 inhabitants of the Algarve region are foreign nationals (ie 67,904 people);

  • 8.86% of the 2,870,208 residents in Greater Lisbon are foreigners (254,300 people).

If we look at the demographic reality of the country with a magnifying glass, it is clear that the population only grew in 50 municipalities. And it is precisely in the districts of Faro, Setúbal and Lisbon that the municipalities that recorded the greatest population increase between 2011 and 2021 are concentrated, the Census data also reveal. The biggest increase of all was even registered in Odemira (13.3%), a municipality on the Alentejo coast, where almost 30 thousand people now live. Soon after is Mafra, registering a population increase of 12.8% to more than 86 thousand inhabitants.

House prices rise in the 20 municipalities that made the biggest demographic leap

With the number of inhabitants growing in these municipalities, it remains to be seen what is the effect of the pressure exerted on the demand for houses on the prices of houses to buy, in a country where the supply of houses is scarce from one end to the other – a reality that More Housing is now proposed to change. That's exactly what idealista/news sought to find out by crossing demographic data from the 2021 Census with the prices of houses sold calculated by INE, which only has data available by municipality up to 2019.

The data reveal that in the 20 municipalities where the population grew the most in Portugal in the last decade, house prices have also been rising, at least, in the last three years. In Odemira, which recorded the biggest demographic leap, house prices rose by 30.7% between 2019 and 2022, settling at 1,477 euros/m2 in median terms, reveal the data. Also in Mafra – the second municipality with the highest population growth – houses became 53% more expensive in this period.

In these 20 municipalities, where the number of inhabitants grew the most in 10 years, house prices increased, in median terms, between 61% and 22% in the last three years, with the maximum increase being registered in Palmela (District of Setúbal) and the minimum in Sobral de Monte Agraço (Lisbon).

What also stands out is that 15 of the 20 municipalities have a price of houses sold in 2022 higher than the national median of 1,484 euros/m2 (+36% compared to 2019). Below this value are the (median) house prices in Odemira, Arruda dos Vinhos, Braga, Sobral de Monte Agraço and in the municipality of Madalena (in the Azores).

IMT revenue doubles in municipalities where the population has grown the most: why?

The municipalities on the coast of the country and with the largest population are those that raised the most revenue from the sale of properties in 2021, namely the Municipal Property Tax (IMT). “The volume of IMT collected at national level increased by around 38.0%”, and “the total amount collected by the 308 municipalities was 1,344.9 million euros”, reads in the Financial Yearbook of Municipalities.

It should be noted that it is also in the 20 municipalities where the population grew the most in the last decade that at least doubled the revenue from real estate transactions. The case of Alcochete is the most glaring: here, IMT revenue increased by 894% between 2012 and 2021, mainly due to the sale of apartments and villas to Portuguese and foreigners, according to Expresso. The municipality of Vila do Bispo, in the Algarve, also accounted for over 609% of this revenue, data show. Here, the rise in revenue comes mainly from the sale of houses to foreigners, according to the mayor Rute Silva herself, quoted by the same outlet.

Yet, the opposite is also true. Many municipalities that recorded a population loss in the last decade saw IMT revenues rise between these two moments, the publication also indicates. One of the most notorious cases is that of Almeirim (Santarém): although the number of inhabitants contracted 5.84% between 2011 and 2021, the municipality saw revenues shoot up 1969% between 2012 and 2021. , Pedro Miguel Ribeiro, this jump in IMT revenue comes from the logistical businesses carried out in the area, as well as from the rise in house prices. Other examples are Mourão (Évora), Alcácer do Sal or Grândola (both in the district of Setúbal).

The increase in IMT revenue at national level – and in most municipalities – can be explained by several reasons, from the rise in house prices to greater housing purchases, both by Portuguese and foreigners in the last decade. Added to these factors are the sale of land for construction and transactions in the field of commercial real estate (for commercial, logistical or even tourism purposes). And without forgetting the purchase of second homes, Local Accommodation and transactions carried out with a view to obtaining gold visas.

Source: Idealista


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