If you’re looking to buy a home in Portugal soon, you may be wondering – what’s going on with Portugal’s property market? We bring you the latest news.
Property prices levelling off
Like many other European countries, house prices in Portugal have begun to level off after a period of exponential growth.
Over the last year or so, prices have been increasing at a rapid pace. According to Portugal’s statistics institute (the Instituto Nacional de Estatística), figures for the final quarter of 2021 showed a 14.1% year-on-year increase.
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However, some regions exceeded that average by a considerable margin. Prices in the Algarve rose by 15.8%, and the island of Madeira saw increases of 20.3%.
This was due to pent-up demand following the pandemic, an imbalance of supply and demand due to construction delays, widely available mortgages and other facts.
However, there is evidence to show that property prices seem to be levelling, with prices decreasing by 0.6% in May. Most experts agree that high inflation, contributing to cost-of-living pressures, will stop the rapid price increases seen over the past couple of years.
Construction activity increasing
The easing of pandemic-related restrictions has meant that construction activity has started to pick up again. In 2021, the number of licensed dwelling permits in Portugal rose by 13.3%, according to the Instituto Nacional de Estatistica.
This may also have contributed to the slowing of price increases, as supply and demand are starting to become more balanced.
The European Commission expects the Portuguese economy to grow by 5.8% this year after declining in 2020 and returning to growth in 2021.
If you would like further advice on the buying process in Portugal, download your free Portugal Guide.
More international buyers
Despite the price slowdown, a recent report showed that during the second quarter of this year, there was a 29% increase in interest from overseas buyers, with a 19% uplift from UK buyers compared to last year.
Most overseas buyers are interested in purchasing a house in Lisbon, Porto, Braga, Leiria and Aveiro.
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