Construction cost inflation spikes in Brazil and Portugal

In Brazil, construction‑cost inflation has accelerated sharply, with the INCC‑DI index rising 5.9% in 2025 and projections pointing to 7‑8% in 2026. The surge is linked to higher material prices after the war in the Middle East, where prices for steel, cement and other inputs rose 9% and labour costs increased 7.5%. Analysts warn the increase could raise the price of new apartments and strain buyers' purchasing power, although some developers say the impact on sales will be limited.

In Portugal, the National Statistics Institute reported a 6.9% year‑on‑year rise in the cost of new housing construction in May. Materials prices climbed 6.4% and labour costs 7.5%, driven by sharp jumps in bitumen, diesel (around 30%) and copper, PVC tubing (about 25%). The monthly index rose 1.1% from April. The data suggest continued pressure on housing affordability and construction budgeting in both countries.