The Organisation for Economic Co-operation and Development (OECD) found that Portuguese people need around 11.4 years of medium average wages to be able to buy a 100m2 home. In 2000, 11.3 years of wages were needed, reports Idealista.
House prices are growing exponentially in Portugal. Idealista reports that house prices in the first trimester of 2022 grew around 12.9%, the largest increase since 2010.
However, since the average income of Portuguese families does not match the housing price increase, it is much harder for them to afford to purchase a property.
There are other OECD countries that have worse situations where families with the average salary take longer to afford a home. In New Zealand, families need 18.7 years of medium average wages to afford a home, the worse off country.
In South Korea they need 16.6 years, in Ireland, they need 16.1 years, in Luxembourg, they need 14.4 years, and in Australia, they need 14.4 years. These are the five countries where families take the longest to afford a 100m2 with the average salary.
The list is then followed by Greece (13 years), the Netherlands (12.9 years), France (12.8 years), Switzerland (12.6 years), Austria (11.9 years), and Hungary (11.6 years).
The OECD reports that the number of years it takes to buy a 100m2 house with the average salary increase in almost all of the OECD. It almost doubled in some countries between 2000 and 2020. This is not the case for Portugal, with less than a 1% increase in the last 20 years.
The OECD also concluded that inflation is increasing rental prices, reducing the income available to families renting in the private market. This worsens their financial well-being and makes it harder to save for buying a primary home.