Housing cost inflation remains high in some advanced economies, including Portugal. This is the conclusion from the Organization for Economic Cooperation and Development (OECD), which places Portugal in fifth place among the states in which this scenario takes place.

In the economic forecast update report, the institution highlights that housing costs, a component of service price inflation, have “exerted persistent upward pressure on inflation in many countries.”

The OECD highlights that the supply of housing has not kept pace with population growth in recent years, including due to immigration.

“Strong demand for housing and the recovery in labour mobility after the pandemic have helped keep prices high despite tight monetary policy and generated strong increases in housing rents in several advanced economies, including the United Kingdom, Canada, Australia, Latvia and Portugal“.

The institution warns that “fewer affordable housing in more dynamic regions may restrict the ability of individuals to settle there, contributing to labour shortages.”

At the same time, as interest rates decline, upward pressure on housing prices may continue unless supply increases “substantially.”