Portugal’s new-home construction-cost index rose 7.5% year on year in August 2026, according to Statistics Portugal (INE). Both tracked components increased: material costs rose 7.1% and labour costs 8.0%. These are changes in a national index—not a quote for building a house or a price per square metre.
What the latest figures measure
INE published its August 2026 estimate on 9 October 2026. The agency reported: “Em agosto, estima-se que os custos de construção de habitação nova tenham aumentado 7,5% em termos homólogos, situando-se 1,0 pontos percentuais (p.p.) acima da variação observada no mês anterior.” In English: in August, new-home construction costs were estimated to have risen 7.5% year on year, 1.0 percentage point above the rate observed the previous month.
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The figure compares the index in August 2026 with the same month a year earlier. It does not mean every builder’s costs, every project’s budget or every home’s price increased by that amount. INE’s materials and labour figures are component changes within the index, not a breakdown of a particular building contract.
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The latest annual movement sits against a substantial longer-term rise, but the periods and measures should not be conflated.
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| Measure | Reported figure | Period and source |
|---|---|---|
| New-home construction-cost index | 7.5% year-on-year increase | August 2026; INE, published 9 October 2026 |
| Materials component | 7.1% year-on-year increase | August 2026; INE, published 9 October 2026 |
| Labour component | 8.0% year-on-year increase | August 2026; INE, published 9 October 2026 |
| Construction costs | 40% cumulative increase | Since 2015, as reported by Banco de Portugal in its May 2025 Financial Stability Report |
| Accumulated inflation | 22% | Over the same period since 2015; Banco de Portugal, May 2025 |
| Labour costs | 8.1% increase | 2024; Banco de Portugal, May 2025 |
The 2025 central-bank report said materials had stabilised in 2023 and 2024, even as labour costs continued to rise. That historical description is not a statement about material prices in 2026; the latest INE figures show the materials component increasing in August.
Why costs are rising—and what the figures do not establish
INE’s headline release reports the increase and its material and labour components, but it does not assign a specific share of the August 2026 movement to particular causes. Banco de Portugal identified labour shortages and difficulty obtaining permits as constraints on construction activity. Those conditions help explain the broader pressures facing the sector, but the cited report does not quantify their contribution to INE’s latest monthly estimate.
For context on building activity, Banco de Portugal reported that 25,000 new dwellings were completed in 2024, 4% more than in 2023. That is a separate supply measure, not evidence that construction costs rose or fell by a particular amount because of completions.
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No. An index is useful for tracking cost movement over time; it does not provide a project-specific budget or an average market price per square metre. The source material does not establish a reliable regional or house-specification cost comparison for Portugal.
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A real estimate depends on the land and location, design, size, specification, site conditions, access, utility connections, professional services, approvals and the scope of the builder’s contract. For a decision about a particular plot or design, seek a project-specific estimate from a qualified cost professional or construction firm, and check what is included and excluded before comparing offers.
Why the official €570/m² figure is not a build quote
Portugal’s 2026 statutory average construction value of €570 per square metre belongs to the IMI urban-property valuation framework. The Housing Portal explains that it is an input to the valuation formula used for municipal property tax purposes. It is not a builder’s offer, a market average, or a reliable standalone estimate of what a specific house will cost to construct.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Other official indices are not interchangeable
IMPIC’s material and equipment indices are intended for price-revision formulas in public works. The relevant May 2026 notice lists series with different base periods, so raw index levels from those series should not be compared as though they shared a common starting point. They also serve a different purpose from INE’s new-home construction-cost index.
When reading any construction-cost figure, check the reference period, whether it is a year-on-year or cumulative change, which cost component it covers, and whether it is an index movement or a quote for a defined project. Those distinctions determine what the number can—and cannot—tell you.
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