Increase in New Mortgage Lending and Licensing

5 March 2021 – Ana Custódio

The issuance of new housing permits rose by 2.6%, while new housing loans increased by approximately 7.2% and cement consumption went up by 10.6%, according to a new report published this week by the Association of Civil Construction and Public Works Industries (AICCOPN), for the year 2020.

According to AICCOPN, the overall issuance of residential building permits held mostly steady year-on-year in 2020. Applications for new construction and rehabilitation works diverged, however, with an increase of 2.0% in licensed buildings and 2.6% in dwellings, while the license issuance for housing rehabilitation saw a drop of 7.2%.

On the other hand, the issuance of residential mortgage loans reached a total of 11.389 billion euros in 2020, an increase of 7.2% y-o-y, and a new high for the series since 2008.  The study reports that residential bank valuations conducted for mortgage applications also rose to a new high €1,156/m2, in 2020, a year-on-year increase of 6.0%.

The study also states that cement consumption in the Portuguese domestic market saw a significant increase in 2020, up 10.6% to 3.57 million tonnes. Despite the Covid-19 pandemic and its associated lockdowns, that increase continues a trend that began in 2017. That figure also represents a ten-year high.

AICCOPN’s real estate barometer made a special note of the Autonomous Region of Madeira, where the local government issued a total of 472 new licences for new builds last year, an increase of 28.3% compared to the 368 dwellings licensed in 2019. Of these, 55.1% were three-bedroom homes, while another 32.8% were two-bedroom dwellings. Bank valuations in the region were also up by 4.4% to 1,179 € per m2 in December.

Translation: Richard Turner