Portuguese house prices up 7.9pc

Portuguese house prices have risen by almost 8 per cent in the first quarter of the year, as new homes help to drive the market recovery.

The latest official figures from the INE show that property values have risen 7.9 per cent in the first three months of 2017, compared to the same period in 2016, 0.3 per cent up on the annual growth recorded in Q4 2016. Prices jumped 9.2 per cent for existing dwellings, the same as in the last quarter of 2016, while new homes enjoyed significant growth of 4.2 per cent – the highest rate since the start of 2016.

On a quarter-to-quarter basis, the HPI rose 2.1 per cent, although existing homes were the drivers of improvement, with values more than doubling the rate of change recorded in the previous quarter (2.5 per cent, compared to the 1.2 per cent in the fourth quarter of 2016). In the case of new dwellings, prices increased 0.8 per cent, 0.2 percentage points slower than in the previous quarter.

The figures arrive as the RICS/Ci latest housing survey is released, highlighting the continuing healthy growth of the country’s real estate market. Prices continued to increase nationally in May, according to agents, although the rate of growth eased slightly in comparison to the record monthly pace reported in April. Alongside this, demand growth remains strong, as a net balance of 36 per cent more respondents noted an increase in new buyer enquiries (in line with consistently solid readings over the past five months).

Supply is now the headwind on the market recovery horizon, as new sales listings continued to decline, with respondents in the Algarve reporting the most significant drop in new listings coming onto the market since 2011. The decline in new listings continues to support price growth.

Ricardo Guimarães, Director of Ci: “Agents are all very clear: the lack of supply is the main constraint on their activity and also the main factor determining how prices are changing. This appears to be a topic that will dominate trends over the coming months. Meanwhile, prices are starting to move up, and not only across main cities. Price growth is becoming more widespread and this may induce a turning point, enabling development and financing of new properties, thereby reducing the gap between demand and supply. But this will take time.”

Looking ahead over the next 12 months, contributors envisage prices increasing by around 4 per cent nationally. Over the next 5 years, house price inflation is expected to average around 5 per cent per annum.


Strong demand fuels Portuguese price growth

3rd April 2017

Strong demand continues to fuel price growth in Portugal’s property market.

The latest RICS/Ci Portuguese Housing Market Survey shows that transaction volumes continue to pick up at a solid pace, with estate agents reporting a “strong increase” in new buyers enquiries in February 2017. Indeed, agreed sales rose at the sharpest monthly pace since September 2015. What’s more, the rate of sales growth has now strengthened in each of the last three reports. Going forward, respondents envisage transactionvolumes will continue to increase smartly over the next three months.

New sales instructions rose marginally for the second consecutive period, although this modest increase was once again outpaced by that of demand. These conditions continue to place significant upward pressure on house prices, albeit the rate of growth did soften in February (after four straight months in which house price inflation had accelerated).

Lisbon is thought to be the market with the strongest increase, but respondents to the RICS survey also highlight Algarve as a location primed for significant price growth in the near future.

Nationally, house price inflation is projected to accelerate to average nearly 5 per cent per annum over the next five years.


Portuguese house prices enjoy record growth

13th February 2017

Portuguese house prices enjoyed record growth in the third quarter of 2016.

The country’s official house price index showed that property values jumped 7.6 per cent year-on-year in the three months to September 2016, the third month in which the index has risen by more than 6 per cent and the highest price increase the index has ever recorded.

The annual growth was 1.3 percentage points higher than in Q2 2016. The prices of existing homes continued to increase more than the prices of new dwellings (9.1 per cent versus 3.7 per cent), a trend that has been evidence since the last quarter of 2014.

Sales of Portuguese property are also on the up, with a total of 31,535 dwellings transacted from July to September 2016, an increase of 15.8 per cent over the same period in 2015. The boost in the number of sold properties was mainly driven by existing dwelling purchases. While sales of this type of property increased 19.2 per cent, new dwellings transactions increased 1 per cent. In terms of value, property sales totalled €3.6 billion, €2.8 billion of which related to transactions of existing dwellings.


Portuguese house prices accelerate at fastest pace in six years

16th November 2016

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 fresh 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 professionals 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.”