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Housing

Diesel Up 35 Percent, Copper Wire Up 30: Portugal's Cost of Building a New Home Accelerates to 7.4 Percent

New-build construction costs rose 7.4 percent in the year to September, level with June as the fastest since February 2023. Materials (up 7.2 percent) have caught up with labour (up 7.7 percent), led by diesel, copper wire, bitumen and PVC pipes.

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Written in English, with the help of AI tools, from the Portuguese sources named in this story. How we work

Diesel Up 35 Percent, Copper Wire Up 30: Portugal's Cost of Building a New Home Accelerates to 7.4 Percent
Buildings being rebuilt behind their facades on Rua do Loureiro, Porto. Photo: Michael Gaylard, Wikimedia Commons, CC BY 4.0

The cost of building a new home in Portugal was 7.4 percent higher in September than a year earlier, according to the Índice de Custos de Construção de Habitação Nova (ICCHN, new housing construction cost index) published on Monday by the Instituto Nacional de Estatística (INE, Statistics Portugal). The rate is 0.1 percentage points above August's and level with June's as the highest annual reading since February 2023, when it stood at 9.3 percent.

Materials rose 7.2 percent and labour 7.7 percent. Over the month, the index climbed 0.8 percent, with labour up 1.3 percent and materials up 0.4 percent.

Materials have caught up with wages

A year ago the picture was lopsided. In September 2025 labour costs were rising 8.6 percent while materials were up just 1.4 percent. Materials inflation stayed close to 1 percent until February, jumped to 4.0 percent in March and has stood above 6 percent since May. In September materials contributed 3.8 percentage points of the 7.4 percent rise, slightly more than labour's 3.6 points. The 7.2 percent rise in materials is the steepest since February 2023, INE's data tables show.

INE names the materials that pushed hardest:

  • Diesel: up about 35 percent on a year earlier.
  • Bare and coated copper wire: up about 30 percent.
  • Bitumen: up about 25 percent.
  • PVC pipes: up about 20 percent.

Only limestone and granite tiles and stonework were cheaper than a year before, and only slightly.

The longer view shows how far costs have travelled. On INE's index, where the 2021 average equals 100, the total stood at 135.69 in September: new-build costs are about 36 percent above their 2021 level. Labour has risen further (146.41) than materials (127.33). Averaged over the last 12 months, costs were up 5.8 percent, against 3.9 percent in the 12 months to September 2025.

Early readings have been revised down

Labour figures come from administrative data and are revised for two months after first publication. August's first estimate of 7.5 percent, which we reported in October, is now 7.3 percent; July's, first put at 6.8 percent in our September report, is now final at 6.5 percent. September's 7.4 percent is a first estimate and could move too. The trend is clear even so: the annual rate was 4.2 percent in January and has been above 6 percent every month since May.

What it means for you

  • It measures builders' costs, not sale prices: the ICCHN tracks what it costs to put up residential buildings (materials, weighted at 56 percent, and labour, at 44 percent). It is not a house price index, and INE draws no link between the two in this release. For how prices have moved against incomes, see our report on Eurostat's house price data.
  • New-build only: the index covers new housing, not renovation work. Many of the items INE singles out, such as copper wire and PVC pipes, are also used in renovations, but this release does not measure what repair or refurbishment jobs cost.
  • Next reading: INE publishes the October figure on 10 December 2026.

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