March of this year saw record house sales in Portugal

4 May 2017

“The increase in home purchase and sales transactions was accompanied by increased demand from new buyers as well as improved expectations for both sales and demand,” the latest PHMS survey revealed. 

The sale of houses in Portugal grew in March this year “at the strongest pace” ever recorded by the monthly Portuguese Housing Market Survey (PHMS), published since 2010, according to the latest data released on Thursday.

“The increase in home purchase and sales transactions was accompanied by increased demand from new buyers as well as improved expectations for both sales and demand,” the latest PHMS survey revealed, indicating that this dynamic was apparent in the three regions analyzed – Lisbon, Porto and Algarve.

Based on responses from 150 people active in the real estate sector, it is expected that growth in the purchase and sales market for houses “will intensify even more in the next three months, surpassing even previous forecasts.”

According to Simon Rubinsohn, economist at the Royal Institution of Chartered Surveyors (RICS), the record pace of home sales in March this year reflects the improvement in the country’s economic environment, namely the decline in the unemployment rate and a consistent expansion of the labor market over the last 12 months, coinciding with a marked increase in consumer confidence.

According to the PHMS survey, the placement of new properties on the market is not keeping up with demand growth for homes, “a mismatch that continues to drive up prices, which in March maintained a similar increase to that recorded in February “.

Real estate entrepreneurs, surveyed at PHMS, anticipate that “over the next 12 months, the most significant price hikes should happen in the Algarve region.”

“From a long-term perspective, the expectation is that, over the next five years, a convergence in the pace of price growth in the Algarve and Lisbon will occur, and in the case of the Porto market, expectations are more modest “, according to the respondents.

In relation to the rental market, rents registered “sustained and more rapid increases throughout the month of March,” the PHMS survey stated, and concluded that supply shortages continue to boost rents.

According to Ricardo Guimarães, director of the data company Confidencial Imobiliário, the continuous decline in expectations regarding the future number of new rental agreements is occurring “along with a strong increase in lending activity, suggesting that potential tenants are potentially starting to consider loans as an alternative.”

“In the future, this may reduce the pressure on rents, which has been driven by lack of supply,” Ricardo Guimarães said.

The PHMS is a monthly survey conducted in partnership between Confidencial Imobiliário and RICS, used for creating a Confidence and Expectations Index for the metropolitan areas of Lisbon, Porto and Algarve.

Original Story – Público

Photo: Patricia Martins/ARQUIVO

Translation: Richard Turner