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Real Estate Powers Construction to Nine-Year Highs

29 September 2017

Residential property sales reached nine-year high, both in number and amounts, for the first half of 2017, according to data released by INE.

According to an analysis by the Portuguese Construction Industry and Public Works Federation, 72,000 properties in Portugal were negotiated in the first six months of 2017. Total sales were 8.9 billion euros, a growth of 18% in the number transactions and 25% in value, compared to the same period in 2016.

As was the case from 2013 to 2016, the sale of existing homes (with a 21% increase in number and 31% in value, leading to a sharp increase in the volume of renovations) was the primary driver of the dynamism observed in the sector in the first half of 2017. New property transactions grew only 4% in number and 6% in value up to June.

The Lisbon Metropolitan Area accounted for the largest share of operations carried out during the first half of the year, 35% of the total in number and 48% in value, with a growth of 17% and 29%, respectively, compared to the same period of 2016.

The Lisbon Metropolitan Area also had the highest average transaction amount by property, 168,600 euros, 10.2% above the amount observed in the region in 2016 and 36.6% above the national average in 2017 (€123,500/property).

Further growth

In addition to the significant increases in the real estate market, there are also favourable variations in the other segments of the Construction sector. The public works market saw increases of 91% and 83% in the number of public tenders and contracts awarded, respectively.

The numbers described above point to a favourable environment for construction spending in the year to date. The INE confirmed the trend with the disclosure of relevant data, the Gross Fixed Capital Formation – Construction and the Gross Added Value – Construction indices, which grew by 9.6 % and 7.5% respectively, during the first half of 2017. It was the most intense growth in the last 20 years for these variables.

Original Story: Construír – Ricardo Batista

Translation: Richard Turner