Property prices in Portugal are expected to grow at an average annual rate of 6% in the next five years. The trend is apparently ‘here to stay’ and is largely explained by “too much demand and not enough supply”.
The forecast is made in the November edition of the Portuguese Housing Market Survey (PHMS), carried out every month by RICS (Royal Institute of Chartered Surveyors) and Confidencial Imobiliário (CI) magazine.
Data from the PHMS shows that the real estate sector continues to report an increase in demand from buyers, though not as significant as before. Sales are on the rise, but the number of new properties on the market is falling.
Prices continue to increase in Lisbon, Porto and the Algarve, while Porto has actually seen its rate of growth “accelerate”.
The property market has also reported a growth in rental business, but with the number of properties for rent dropping more notably than the previous year, realtors are concerned, says Ricardo Guimarães from CI.
However, “new residential projects are in the pipeline”, he revealed, which could help stabilise the property market.
“Compared to the previous year, licences for residential projects increased 66% in Lisbon and 82% in Porto,” he says.
“These new constructions will certainly alleviate the pressure on prices and help stabilise the market.”
The recovery of the Portuguese economy is also expected to help bolster the property sector.
“The Portuguese economy registered a solid recovery and 2017 may well have registered the largest growth in the last decade,” says Simon Rubinsohn, Senior Economist of RICS.
“The forecasts for 2018 are equally positive and job growth, alongside low inflation, should continue to provide a solid foundation for consumption and ensure that the setting for the development of the residential market will remain favourable in the future,” he adds.