According to the Bank of Portugal (BdP), Brazilians are leading the home loan market in 2022, followed by Angolans, Americans, and Brits. Despite rising interest rates, the demand for home loans in Portugal remains strong. In 2022, 169,000 people took out home loans, 2,000 more than in 2021, and the total borrowed amount increased by 14%. Although Portuguese citizens still receive the majority of loans, the number of Portuguese borrowers has decreased while foreign demand has risen. The increase in demand by foreigners, including Brazilians, Angolans, Americans, Brits, and Ukrainians, helped to boost the mortgage market in 2022.
More foreigners are borrowing to buy homes in Portugal
The year 2022 marked by economic and financial uncertainty ended positively with a total of 16 billion euros granted in home loans, 14% more than in 2021. Portuguese citizens still receive the majority of loans but their demand has decreased. In 2022, 153,000 Portuguese citizens applied for home loans, 2,000 fewer than in 2021. Meanwhile, 16,000 foreigners took out loans, 4,000 more than in 2021. The rise in interest rates and inflation, along with tightened loan criteria, made it difficult for Portuguese citizens with lower incomes to access home loans. Banks granted an average of 90,000 euros to each Portuguese citizen in 2022, 12% more than in 2021.
Brazilians lead the home loan market
The majority of the 16,000 foreigners who took out home loans in 2022 are Brazilians (29%), followed by Angolans, Americans, Brits, and French citizens. The amount of housing loans issued to foreigners increased from 1.5 billion in 2021 to 2.2 billion in 2022, representing 14% of the total, which is 3 percentage points more than in 2021. Foreigners, on average, asked for more capital to buy a house in 2022 (139,000 euros) than in 2021 (around 125,000 euros).
Socio-demographic analysis
Idealista/news analyzed the socio-demographic data of those who took out home loans in 2022 to understand who these foreigners are. The majority of the Brazilians who took out loans are under 40 years old and employed with higher education. Most live in the Lisbon Metropolitan Area. Angolans who took out loans are mainly under 40 or between 41 and 50 years old, employed, and with higher education. They mostly live in the Lisbon Metropolitan Area. The majority of Americans who took out loans are between 41 and 60 years old, employed, and with higher education. They live in various regions of the country, with the majority residing in the Lisbon Metropolitan Area. The majority of Brits who took out loans are between 41 and 60 years old, employed, and with higher education. They mostly reside in the Algarve. The majority of Ukrainians who took out loans are under 40 years old, employed, and have a secondary school education or higher education. They live in various regions of the country, with the majority residing in the Greater Lisbon area.
Conclusion
In conclusion, foreigners, including Brazilians, Angolans, Americans, Brits, and Ukrainians, boosted the home loan market in Portugal in 2022. They are mostly employed and have higher education, with most residing in the Lisbon Metropolitan Area. The rise in demand by foreigners helped to counteract the decrease in demand by Portuguese citizens, resulting in a positive overall increase in home loan demand in 2022.
