Demand for Portuguese property outpaces supply

Photo:   Chris Yunker

Demand for Portuguese property continues to outpace supply, pushing up property prices steadily for the last eight months.

House price growth slowed in July 2015, according to the latest RICS/Ci PHMS, but sales continue to climb. New buyer enquiries have now increased continuously over an entire two year period. Crucially, in net balance terms, demand growth has outpaced that of supply in 10 of the previous 12 months, contributing significantly to the market turnaround.

Indeed, prices have now increased in each of the last eight months following four years of persistent decline.

Going forward, survey respondents expect stronger growth in the near term and anticipate prices will increase by approximately 2.5 per cent over the next 12 months. What’s more, prices are expected to rise around 5 per cent nationally,
per annum, over the next five years.

RICS Chief Economist Simon Rubinsohn comments: “With GDP estimated to have increased for six consecutive quarters, the recovery in the Portuguese economy has gained a firmer footing. This should underpin housing market activity going forward, provided we also see a continued pick up in employment and consumer confidence.”

The positive upturn has also spread to the lettings market, with tenant demand increasing at a “robust” pace. With new landlord instructions slipping back further, rents inched up for the first time since the series was formed in 2011 having held broadly stable since March.