The two key themes of the Portuguese property market today are shortage of supply and increasing demand. For people with a financial stake in the country, that adds up to a good thing.
According to the most recent report from RICS and Confidencial Imobiliário, “buyer demand continues to outstrip supply.” This is leading to climbing prices across the country. Despite this, it is worthy of note that the overall prediction for the year is for steady 3 percent growth – a healthy figure, but one that has changed little throughout the year. Still “slow and steady wins the race,” as the saying goes.
Lisbon is expected to record the sharpest price growth this year, with the Algarve coming very close.
Another trend that continues is slower price growth in the north of the country, particularly around Porto. Lisbon is expected to record the sharpest price growth this year, with the Algarve coming very close.
Significantly, despite price rises being steady rather than stratospheric, they are in fact faster than at any time since 2010, according to the report.
Owners hold off.
One factor affecting the market significantly is that fewer properties are being placed up for sale. With some capital appreciation all but certain, it makes sense that people (particularly investors) are choosing to hang on their Portuguese property assets. This is obviously contributing to the upward price movement.
The metric for “near term sales expectations,” fell during the month of August (the month this RICS report refers to). Anecdotally speaking, some agents report that business does slow during peak summer months, when many people on holiday walk into property offices on a whim. One theory is that the more serious buyers hold off until the quieter “shoulder season”.
High value rentals
Once again, there’s also news of a very strong rentals market. This has now been the case for several consecutive months. Rental properties are in huge demand and supply is very low. This has resulted in prices moving upwards, sometimes quite significantly.
This fact is emphasised when one speaks to people in the business. Once peak summer is over it’s usually quite straightforward for expats to find a long-term rental, with owners tempted by the certainty of income over the winter. Rentals of this nature are reportedly much harder to find this year.
It’s worth remembering also that Portugal has just been through a record-breaking tourist season, with many visitors seeing the country for the first time after switching from previously-favoured destinations like Egypt or Turkey. It seems inevitable that plenty will have fallen for the area’s charms and those people will potentially form an extra customer-base for more lucrative short-term rentals.