Young people lead the way in mortgage lending: a new profile that is redefining the market

A significant shift is taking place in the mortgage market in Portugal: young people—up to 35 years old—now account for the majority of new mortgage contracts. According to recent data from the Bank of Portugal released by Idealista, this group now accounts for 59% of new contracts for owner-occupied housing.

This phenomenon reveals not only a demographic change, but also new opportunities and challenges for real estate investors who are attentive to this emerging profile. In this article, we analyze what this data means for the market, what forces are driving it, and how you can position yourself strategically.

What is driving young people to apply for credit?

Several factors contribute to this increase in young people's participation in the mortgage market:

• Tax benefits and support measures: In 2024, measures such as exemption from IMT (property transfer tax) and stamp duty for young people up to the age of 35 were implemented, which reduced the cost of entry.
• State guarantee: The state began to support or guarantee part of the credit for young people up to 35 years of age, making access easier and less risky.
• Changes in behavior and priorities: The younger generation values housing stability and investment in property, even in a context of high interest rates and costs.
• Relationship between credit value and property value: Young people are obtaining loans representing up to 82% of the property value, compared to around 58% for groups over 35.

Implications for the real estate market and investors

The predominance of young people in mortgage lending has a significant impact on the real estate market:

1. Greater demand for adapted types of property

The demand for one-bedroom, two-bedroom, and compact apartments in urban areas is likely to grow, as these profiles seek more affordable solutions close to infrastructure.

2. Appreciation of peripheral areas

With urban centers saturated, many young people are considering peripheral municipalities with good transport links, creating investment opportunities in areas with growth potential.

3. Pressure for good quality and efficiency

Young buyers value properties with energy certifications, modern finishes, and built-in technology, which raises the standard required and the potential value of properties.

4. Risk and sensitivity to interest rates

Although they benefit from support, this segment is also more vulnerable to changes in Euribor rates and monthly charges. Investors should be cautious when calculating safe margins.

5. Potential for appreciation

By building a portfolio suited to emerging areas favored by young buyers, there is a greater likelihood of appreciation in the medium term.

The rise of young people taking out mortgages is not just a statistic: it is a sign of structural change in the Portuguese real estate market. For investors, it represents a new demographic with distinct desires, priorities, and behaviors—which brings significant opportunities for those who know how to adapt.

Do you want to align your real estate portfolio with emerging trends and take advantage of these new dynamics in the young market? IR Group is ready to help you invest with vision and strategy. Contact us and find out how to position yourself in the present to profit in the future.