A new measure in Portugal offers young people up to age 35 a state guarantee to obtain a 100% mortgage when buying their first home. The aim is to assist young buyers struggling to enter the property market, with the law published on 10 July and awaiting regulation within 60 days. To qualify, young people must earn up to €5,800 gross per month and buy a house for a maximum of €450,000. However, the plan faces challenges due to low incomes and high house prices in the country.
Most young people earn less than €1,000 a month, making it difficult for banks to grant them loans, while affordable housing is in short supply. The governor of the Bank of Portugal warned of potential additional pressure on the market until supply catches up. Despite a 9.2% increase in home supply in 2023, more efforts to facilitate municipal licensing and construction are needed to address the issue.
Economists suggest exploring ways to rehabilitate areas for housing, particularly for young university students. The regulations for implementing the new measure are expected to be made public by 11 September. While the measure may help some young buyers, more long-term solutions addressing housing supply and affordability issues are needed to ensure sustainable access to home ownership for Portugal’s younger generation.
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