Portugal finds itself in a very challenging environment, as one of the countries in Europe with the lowest GDP per capita, and a soaring real estate market that seems to have no end in sight.

While still recovering from the effect the pandemic had on the local economy, due to its over-dependence on the tourism sectors, Portuguese families are finding it hard to keep up with inflation, and rising costs.

This coupled with one of the hottest real estate markets in Europe, which prices the average family out of a home is set up to be one of the first European real estate bubbles to collapse.

Over 93% of all mortgages in Portugal have variable rates, compared with the European average of 15%, affecting 1.3 million families.
With rising interest rates, foreclosures are expected to rise in 2023.
Real wages have decreased 4.6% in the first half of 2022, and the wage increases in 2023 will be lower than inflation.
Rising interest rates will also contribute to increased costs for personal and auto loans.
Higher inflation and higher energy prices will put additional pressure on savings.
Over 700,000 properties are completely unused, and 1.1 million are used as second-home and short-term rentals.
Increases in mortgage payments are expected to be between 10% and 17% until the end of the year.
Further rate hikes by the ECB, could pose a threat to the Portuguese housing market.

https://valueofstocks.com/2022/09/16/the-biggest-housing-bubble-in-europe-is-about-to-burst/

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