Housing construction costs increased by 7.5 percent in Portugal: Labor and material prices increase the pressure

The cost of building new housing in Portugal continues to rise. According to the estimate of the Instituto Nacional de Estatística (INE) announced on October 9, new housing construction costs increased by 7.5 percent in August compared to the same period last year.

Both labor costs and prices of building materials were effective in the increase.

However, this rate does not mean that house prices or rents for sale in Portugal increased by 7.5 percent in the same period.

Labor costs increased by 8 percent

According to INE's estimates, labor costs in new housing construction increased by 8 percent annually in August.

A 7.1 percent increase was calculated in building materials.

The rise in both components puts pressure on new housing production costs.

Especially the increase in labor costs shows that not only material prices but also personnel costs in the construction sector are important.

Which materials have price pressure?

In INE's evaluation, price movements in diesel oil, copper, PVC pipes and some insulation materials attract attention.

These products are used in different stages of residential construction.

While it affects the costs of diesel, construction machinery and transportation, copper is used in electrical installations and PVC pipes are used in various infrastructure applications.

However, an increase in the price of a particular material does not mean that the total construction cost increases at the same rate.

Total of each material Their weight in cost is different.

Will the sales price of new houses increase at the same rate?

It is not possible to say this directly.

The indicator announced by INE is about new housing construction costs.

House prices for sale are also affected by other factors such as land cost, financing conditions, location, demand, existing housing stock and developers' pricing.

Therefore, while construction costs increase by 7.5 percent, housing sales prices in a particular city may vary higher or lower.

Why is it important for housing supply?

Rising new housing production costs may complicate the economic feasibility of some projects.

Cost pressure is especially important in projects that aim to produce housing with lower sales or rental prices.

However, it is not possible to determine how much the increase in construction costs alone will reduce the supply of new housing.

It needs to be evaluated together with indicators such as license numbers, completed residences and new project starts.

What should those who are building a house or planning a renovation do?

It is important for people who are considering building a house to evaluate labor and material costs separately.

When receiving a quote, the scope of work, materials to be used, payment schedule and price update provisions should be clearly determined.

Especially in long-term projects, changes in material prices may affect the total cost of the contract. may affect.

However, the INE index alone does not indicate whether a particular contractor's offer is right or wrong.

Is the situation the same in Lisboa and Porto?

INE's national new home construction cost index does not mean that all construction projects in a given city are equally expensive.

Labor supply, land costs and project types may differ in Lisboa, Porto and other regions.

For this reason, although the national index is an important indicator in evaluating the local market, it does not replace the exact cost calculation on a city basis.

Resources

Lusa — Custos de construção de casas novas sobem 7,5% em agosto, 9 October 2026

https://folhanacional.pt/2026/10/09/custos-de-construcao-de-casas-novas-sobem-75-em-agosto/

Instituto Nacional de Estatística