Buying a Home in Santana Costs €1,119/m2 Less Than in São Martinho

4 May 2018

The three counties on the northern coast are the cheapest areas to buy a home in Madeira. Porto Santo is the second most expensive. A home in Funchal is €935/m2 more expensive than in Santana.

Buying a house in Santana, besides offering the benefit of living in a quiet rural town that is 42 km away and about 40/45 minutes drive from Funchal, also confers a financial advantage that can make a difference for people nearing retirement. While it’s is true that living in São Martinho, the most expensive parish (per square meter) in Madeira, can be advantageous for the strength of its real estate market, there exists a difference of over 1,100 euros in price compared to homes in the only city ​​on the northern coast of Madeira.

A 200-square-meter home in the parish of São Martinho would cost 313,800 euros at current prices (€1,569/m2). Considering the average price for property in the county of Funchal (€1,385/m2), a similarly sized house would go for €277,000. In the county of Santana, where the price per square meter falls to €450, the buyer would pay just 90,000 thousand euros, a savings of 223,800 euros when compared to São Martinho. For the same price, a buyer could buy three-and-a-half homes in Santana. Compared to Funchal, a buyer would save 187,000 euros, allowing them to buy another two homes and even get seven thousand euros in ‘change.’

These comparisons serve to clearly delineate the enormous disparity in the cost of homes on Madeira, in areas that are just 42 kilometres apart. Two years ago, the difference between the cost in Funchal and Santana stood at €816/m2; now it is €935/m2.

These figures were published last Wednesday by the Regional Directorate of Statistics (DREM) at the same time that INE published data for the country as a whole, showing that in the fourth quarter of 2017 (last 12 months), in Madeira’s Autonomous Region (RAM) “the median price of family housing was 1,126 euros/m2, the highest value recorded since the first quarter of 2016 (when the series began), remaining above the national average (932 euros/m2). Compared to the previous quarter and the previous year, growth came in at 2.9% and 10%, respectively,” DREM reported. “It should also be noted that the value of new housing (1,212 euros/m2) continues to exceed the value of existing housing (1,088 euros/m2) by 124 euros.”

It should be noted that, in these two years, the price of new housing decreased by €64/m2, while the price of existing ones rose by €147/m2.

“Regarding apartments, the price in RAM (€1,249/m2) was significantly higher (+20.8%) than for the country as a whole (€1,034/m2). The difference was more pronounced for existing apartments, with the cost on the island (€1,217/m2) 21.7% higher than in Portugal (€1,000/m2).” Also of note was that the price of existing homes (+€237/m2) rose faster than that of new homes (+€ 190/m2).

Regarding the size of homes, the price per square meter of a studio or one-bedroom apartment in Funchal is worth more €(€1,525/m2) than a three-bedroom apartment (€1,330/m2), a two-bedroom (€1,323/m2) or a four-bedroom or greater (€1,068/m2). The difference between costs has increased in the last two years when they were almost the same.

Price readjustment in banking valuations continues

The market value of real estate in the Madeira Autonomous Region declined in the first three months of 2018, with sharp declines both in Funchal, the region’s bellwether, and for the region as a whole, the opposite of the continued growth in the Portuguese real estate market. After having reached a peak in Funchal in December 2017 (€1,482 euros), the highest figure since at least July 2013, and up from €1,319 since June of last year. While cyclical falls at the beginning of the year are common, the price fell back to below that of January 2017 in just three months.

From January (€1,473/m2) up to March (€1,378/m2), the average value of bank valuation of housing in the Madeira Autonomous Region (RAM) decreased by €104 compared to last month of last year, while they had increased by 163 euros in the previous six months.

In March 2018, the average value of bank valuations in Madeira stood at 1,268 euros/m2, a decrease of 0.2% compared the previous month, and an increase of 4.9% in relation to the same month of the previous year.

Nevertheless, both Madeira and Funchal continue to be some of the most expensive regions of Portugal to buy a home. The RAM was only surpassed by the Algarve (1,463 euros/m2) and the Metropolitan Area of ​​Lisbon (1,420 euros/m2). The Madeiran capital, although behind municipalities like Cascais, Loulé, Lagos, Oeiras and Albufeira, in a list led by Lisbon (€2,438/m2), came in second in a list of cities with more than 100,000 inhabitants, at 1,385 euros/m2.

Original Story: Dnotícias.pt – Francisco José Cardoso

Translation: Richard Turner