Funchal Homes Under €200,000 Drop by 97% Since 2020
The market for affordable housing in Funchal has nearly vanished throughout the past five years. According to data from Idealista, homes priced below €200,000 now make up just 1% of the city’s housing stock, down from more than 25% in 2020. Local experts warn that high construction costs, taxes, and licensing delays are limiting new affordable housing projects.
Funchal Leads Portugal in Lack of Affordable Housing Supply
Across Portugal, Funchal has the lowest supply of homes priced below €200,000 and between €200,000–€300,000.
Mid-Range Properties Between €200,000 and €300,000 Also Plunge 91%
Funchal has not only lost its lowest-priced homes but also most of its mid-range options. The city saw a 91% drop in homes available in the €200,000–€300,000 range.
The truth is that these cheaper homes tend to disappear quickly from the market, as they are more aligned with family incomes. In addition, developers and builders have shown difficulty in placing houses on the market at low prices due to high construction costs, taxes, and other expenses.
Evolution of Housing Supply in Major Cities: Funchal Stands Out
A housing crisis with broad social consequences and the potential to erode societies: Funchal leads nationwide, both in the decrease of available housing below €200,000 and between €200,000 - €300,000.
Luxury Housing Over €500,000 Now Dominates Two-Thirds of Funchal Market
In stark contrast, high-end properties have become the majority of Funchal’s listings. Homes over €500,000 now account for 66% of available housing, reflecting an increasing focus on wealthier buyers. This trend mirrors developments in other cities such as Faro and Lisbon, where luxury homes also make up over 60% of the market.
Wider Portuguese Trends Show Funchal’s Decline Is Part of National Shift
The situation in Funchal reflects a national pattern: across Portugal, affordable housing has fallen dramatically in major cities. While interior towns like Guarda, Portalegre, and Beja still maintain more than half of their stock under €200,000, urban centers increasingly cater to higher-income buyers.
Source: Idealista
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