Lisbon housing costs equal 18.7 years of average income

Lisbon has risen to the top of Europe’s most unaffordable housing markets, with a price‑to‑income ratio of 18.7 years – the same level as Split, Croatia and more than double the threshold of 10 that signals a stressed market. The ratio compares the cost of an average home to median household earnings; a typical 50‑square‑metre apartment in central Lisbon now costs about €338,000, or €6,763 per square metre, against a median net salary of €1,416 per month (€17,000 per year).

The rapid price rise – nearly 240 % over the past decade – far outpaces wage growth, creating a talent drain as professionals struggle to afford local housing. Companies face higher recruitment costs, greater staff turnover and pressure on wages. Supply falls short of demand, with annual construction of 25,000‑30,000 units versus an estimated need of 45,000‑50,000, leaving a deficit of 15,000‑25,000 homes. Public social‑housing provision is only about 2 % of the stock, one of the lowest rates in Europe, further intensifying market pressure.