Lisbon, May 27, 2026 (Lusa) - The European Central Bank (ECB) has highlighted that Portugal was among the eurozone countries with the highest growth in house prices at the end of 2025, warning of the pressure caused by the housing shortage.
In its financial stability report, published on Wednesday, the ECB noted that “residential property prices showed a strong overall increase in Q# 2025, albeit with significant variations between countries”.
“Eurozone countries such as Bulgaria, Croatia, Lithuania and Portugal recorded solid growth in residential property prices and mortgage lending, although household debt remains relatively low in some cases,” the central bank said.
In contrast, Germany, France, Austria and Finland recorded more moderate growth in house prices and mortgage lending.
The ECB also emphasised that housing supply remains insufficient given the increase in demand in several eurozone countries, saying that the residential construction PMI (Purchasing Managers' Index) remains below 50.
"This discrepancy is contributing to a housing shortage, amplifying upward pressure on prices in several markets," the central bank added.
According to the report, house prices are rising faster than incomes in some markets, exacerbating the risks of overvaluation.
"The rise in overvaluation measures, combined with the tightening of financial conditions, has resulted in a slight increase in extreme risks to residential property prices in the eurozone in early 2026".
In the commercial property sector, the ECB considered that the market has stabilised, although structural challenges remain.
The percentage of investors who believe the commercial property market is recovering has remained “broadly stable, but moderate”, below 50%.
“Most investors in markets such as Germany, France and Austria tend to view the market as being near the bottom of the cycle or still in recession,” the document said.
According to the central bank, "most investors in countries such as Greece, Spain and Portugal, however, perceive market conditions as being at the peak of the cycle".
The ECB also warned that financial markets in the eurozone would continue to evolve in an "orderly" manner, but remain exposed to a possible "sharp correction" should the currently highly favourable economic scenarios fail to materialise.
PYR/MYAL // AYLS
Lusa
