Property prices in Portugal rise almost 13% between January-March
Foreign investment in property in Portugal “continues to attract the attention of foreigners”, Dinheiro Vivo reports today.
In the first three months of this year, the sale of homes to citizens of other countries increased by more than 70% on comparable activity in 2021.
According to numbers released by INE (national statistics institute), investors from EU countries increased by 72.3%, while foreigners buying from non-EU countries increased by 79.1%.
In total, foreigners bought 2,556 properties (1,435 purchased by EU nationals, 1,121 by people from other countries), representing a global value of €842.2 million.
“This dynamic was in part due to the fact the market stopped at the beginning of 2021 because of the pandemic”, says the online – admitting that another factor lies in the number of ‘golden visas’ approved since the start of the year.
“In the first five months, acquisition of property through this regime captured €190.2 million”.
The current context of the property market is one of “elevated demand, whether by foreigners or nationals.
“As INE reveals, between January and March there were 43,544 property transactions – an increase on the same period in the year before of 25.8%.
“The purchase of new-builds rose 28.7% (a total of 7,603 homes), while the acquisition of ‘used homes’ saw the greatest level of investment: 35,941 transactions, which represented a comparable increase on the same period last year of 25.2%.
“Families were the prime movers within the market”, the online continues – representing 86.9% of all transactions, which translates into a 28.6% increase on the same period last year.
Totting all activity up, the Portuguese residential market generated a global volume of business in the order of €8.1 billion between January and March, “44% more than the same period in 2021”.
Price increases are at highest level since start of 2010
Market specialists have some reservations over the booming sellers’ market.
Paulo Caiado, president of APEMIP (the Portuguese association of real estate professionals and businesses) says INE’s figures have to be put into context. “They are numbers that come from 20 boroughs in the country”, he told DV. They are not a national overview. Added to this, “supply is very inferior to the fluxes of demand. This is what has put an enormous pressure on prices”.
Increases in building costs which began making themselves felt last year have also affected prices, whether for new-builds or otherwise.
Says DV, in Paulo Caiado’s opinion this year should see a stablisation of property prices in Lisbon and Porto, albeit suburban areas will probably still see increases.
Francisco Bacelar, president of ASMIP (the association of real estate mediators) believes the reason for constantly increasing prices lies in the lack of supply for current demand. He doesn’t see prices stablising anytime soon, particularly because the costs of labour and building materials have increased “immensely”. At the same time, he is not relaxed about the current picture: “What worries us is what will happen afterwards, when it is no longer possible for prices to increase any further. There will come a moment when it will be unsustainable to maintain this pace…”
On cue, just as this text went up online, Mário Centeno, governor of the Bank of Portugal, issued a warning over the possibility that house prices could face a fall (see briefly news…)