According to Idealista, the cost of building a new house in Portugal continues to rise. The problem is not new, but has worsened with the war in Ukraine and soaring inflation.

In July, the cost of building new housing increased by 13.4 percent, up 0.9 percentage points from the previous month, according to estimates released by the National Statistics Institute (INE) on 9 September. The prices of materials and labour costs recorded yearly increases of 17.5 percent and 7.7 percent, respectively.

"In July, the estimated year-on-year change in the Construction Costs Index for New Housing (HNCI) was 13.4 percent, a rate 0.9 p.p. higher than in June. Material prices rose 17.5 percent, accelerating 0.9 percent from the previous month and the cost of labour increased 7.7 percent (6.8 percent in June)," the INE bulletin states.

The cost of materials contributed 10.2 p.p to the formation of the year-on-year rate of change of the HNCI (9.7 percent in June) and the labour component increased its contribution to 3.2 p.p. (2.8 percent in the previous month).

Ceramic product prices continue to climb

Among the materials that most contributed to this evolution are ceramic products, with year-on-year increases of around 70 percent.

Diesel presented a year-on-year growth above 30 percent.

Wood products, cement, cork and cork tiles, carpentry products and PVC pipes showed year-on-year growth above 20 percent.

With regards to the month-on-month change, the monthly rate of change of the HNCI was 1.9 percent in July. Costs of materials and cost of labour increased by 1.9 percent and 1.8 percent respectively. The materials and labour cost components contributed 1.1 p.p. and 0.8 p.p. respectively to the monthly rate of change of the HNCI (-0.8 percent and 0.9 percent in June, in the same order).