According to the National Statistics Institute’s Construction Cost Index for New Housing (HNCI), released today, estimates are that new housing construction costs increased by 6.8% year-on-year in Portugal in December, down 1.5 percentage points from the previous month.
The price of materials and the cost of labour rose by 8.0% and 5.1% year-on-year, respectively. The HNCI reported an average increase of 5.7% in 2021, 3.6 percentage points higher than in 2020. Materials prices increased by 8.0% (9.4% in the previous month), while labour costs were up 5.1% (6.8% in November). According to the INE, the cost of materials contributed 4.6 percentage points to the year-on-year change in the HNCI (5.4 percentage points in November). The labour component contributed 2.2 percentage points (2.9 percentage points in the previous month).
The quarterly rate of change was -1.4% in December. Material and labour costs decreased by 0.7% and 2.3%, respectively. The materials and labour cost components contributed -0.4 percentage point and -1.0 percentage point respectively to the monthly decrease in the HNIC (0.4 percentage point and 0.9 percentage point in November, in the same order).
Annually, the HNCI was up 5.7% in 2021 (vs 2.1% in the previous year). The material and labour indices registered average annual increases of 6.2% and 5.1%, respectively (1.2% and 3.3% in 2020).