Portuguese House Prices are accelerating at their fastest pace in six years, fuelled by demand outpacing supply.
According to the latest RICS/Ci market survey, agents reported a “strong pick-up” in interest from buyers in September, with enquiries rising at their fastest rate in two years. This is despite headlines generated by the country announcing plans for some new property taxes.
Ricardo Guimarães, Director of Ci, comments: “It was inevitable that new taxes on real estate were included among agents concerns, mainly due to the impact on both investors’ expectations and confidence. Nevertheless, global sentiment in the market remains positive, benefiting from the consistent growth in new mortgages. This is pushing demand forward and it is increasingly felt that, in some segments, there’s a lack of stock to sell.”
Indeed, new sales instructions coming to market “fell noticeably” during September, says the report, with Lisbon, Porto and the Algarve each seeing the number of resh listings decline.
At the same time, buyer demand remains strong, with transactions expected to continue climbing over the coming months. That mismatch between supply and driving is pushing property values up.
House price growth has now accelerated for the seventh month in a row, with the latest growth the sharpest uptick since the survey began in 2010.
Over the year ahead, respondents continue to expect Lisbon to post the strongest house price growth on a regional comparison. Between now and 2021, agents and professinoals predict house prices will grow by a minimum of 4 per cent per annum in Lisbon, Porto and the Algarve.
Portuguese house prices rise for 19th month in a row
2nd August 2016
Portuguese house prices have risen for 19 months in a row, as the country’s market continues to recover.
The latest RICS/Ci housing market survey shows an acceleration in house price growth reported by agents in June 2016, with the index recording its highest reading since the survey was launched six years ago.
Momentum is certainly building, with house prices now having risen for 19 months in a row. This “should be viewed in the context of a persistent period of falling house prices between 2010 and 2014”, notes the RICS, but property values are enjoying steady growth, with agents expecting prices to rise around 3 per cent in the coming 12 months – and 4 per cent in the Algarve. Respondents to the survey forecast house price growth of 4 per cent per annum, during the next five years.
Buyers are therefore taking action, with new buyer enquiries up once more in June. Agreed sales reportedly rose at the fastest pace since September 2015, with each region seeing an increase in transaction volumes. Looking ahead, sales are expected to rise further across all areas over the coming quarter.
In the lettings market, tenant demand also rose firmly once more while landlord instructions fell sharply. As a result, rents increased at solid pace and are expected to rise further over the coming months, boosting the country’s appeal to buy-to-let investors seeking a stable income.
On TheMoveChannel.com, demand for Portuguese property has also increased this year, with the country re-entering the portal’s Top Five most popular destinations in June 2016.
Ricardo Guimarães, Director of Ci, says that international demand is “the most important factor” in driving confidence among agents.
“Portugal seems to be in the right place to benefit from the uncertainty that is affecting other markets and from the fiscal advantages it offers investors,” he comments. “This is obviously not felt in all markets, and is particularly boosting the Lisbon region (including Lisbon itself). Nevertheless, other locations are starting to appear on the radars of foreign investors, and this will open more opportunities elsewhere.”