PT
O custo não recuou: apenas cresceu menos
Published in Issue 5 — Building under pressure

Costs did not fall: they merely grew more slowly

Materials and labour continue to make new housing more expensive, despite a slight monthly slowdown.

In July, new housing construction costs increased by 6.8% year on year. Labour rose by 7.3% and materials by 6.3%, maintaining pressure on budgets, contracts and final prices.

O custo não recuou: apenas cresceu menosIssue 5 — Building under pressureRead the complete publication

An increase across the entire project

New housing construction costs increased by 6.8% in July 2026 compared with the same month a year earlier. The rate was 0.6 percentage points below that recorded in June, but the slowdown does not represent a reduction in costs. It merely means that they continued to rise at a slightly slower pace. Materials increased by 6.3% and labour by 7.3%. (idealista.pt)

This distinction is relevant when assessing the market. When growth slows, a budget does not return to previous levels. The new cost base remains in place and continues to affect projects still under development, contracts being procured and works whose financial margins were set before prices were updated.

The effect on projects

The increase in labour costs comes in a context of rising employment in the sector. The arrival of more workers improves delivery capacity, but does not eliminate the pressure associated with demand for skills, specialisation and site management. For materials, the increase affects different construction components and requires solutions, suppliers and purchasing schedules to be reviewed. (aiccopn.pt)

For developers, this trend may reduce the margin available to absorb unforeseen costs or fund elements that are not strictly mandatory. For designers, it increases the risk of decisions being based solely on initial cost, at the expense of performance over the building’s lifetime. For buyers, some of the pressure may emerge in the sale price, payment terms or reductions in floor area and specification levels.

A response based exclusively on substituting cheaper solutions may create costs later. Less insulation, systems that are complex to maintain or materials with lower durability transfer expenses to the building’s users. Budgetary discipline must therefore distinguish between what can be simplified and what protects comfort, energy efficiency, safety and the home’s capacity to adapt.

Planning for the total cost

The current context reinforces the importance of integrating design, construction and operation from the earliest decisions. Repeating components, modular design, reducing waste, early procurement and selecting locally available materials can limit exposure to fluctuations without reducing quality.

Building under pressure demands even greater precision. Costs must be monitored throughout the entire process, not only when the contract is awarded. The analysis should include maintenance, energy consumption, repairability and the expected lifespan of components. When material and labour costs rise simultaneously, efficiency ceases to be merely a technical option: it becomes a condition for preserving economic viability and the quality of the built environment.

Sources consulted

Instituto Nacional de Estatística (INE) · Idealista News · AICCOPN

Read the complete publication

In this issue

Issue 5More capacity, fewer buildingsConstruction employs more people and receives more financing, but these signs of activity have yet to translate into equivalent growth in supply. In the second quarter of 2026, both building permits and completions declined.© MATTERS / Composição gráficaIssue 5Rising house values meet the limit of household incomeAdvertised house prices increased by 7.5% in August. In July, the median bank valuation reached €2,240 per square metre and the average mortgage payment rose to €414.© MATTERS / Ama Grupo Imobiliário®Issue 531,700 homes later, the question of continuity beginsThe Government announced the completion of 31,700 housing solutions funded under the PRR, exceeding the initial target by 5,700. The result concludes a phase of investment, but not the structural problem of supply.Issue 5Refurbishment sustains work but loses its project pipelineUrban refurbishment activity increased by only 0.8% in July. In the first half of 2026, 2,960 refurbishment projects were licensed, 12.5% fewer than in the corresponding period.© MATTERS / Ama Grupo Imobiliário®Issue 5Affordable rent: concrete responses, limited scaleLisbon opened an extraordinary competition for 25 homes intended for young people aged up to 35. In Seixal, 24 validated applications took part in the draw for 12 municipal properties.© MATTERS / Ama Grupo Imobiliário®Issue 5Low carbon reaches the building siteProfessional demand for some sustainable solutions is growing faster than for other material categories. In parallel, research is exploring ways to incorporate carbon dioxide into construction products.© MATTERS / Ama Grupo Imobiliário®

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