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Residential Bank Valuations Rose to €1,215/m2 in June

July 29, 2021 – Ana Custódio

The average value of residential bank valuations rose by three euros in June compared to the month before.

According to the Survey on Bank Valuations of Housing carried out by Portugal’s National Statistics Institute (INE), the increase reached 8.6% (8.8% in May). The number of bank valuations included in the survey also rose to around 30,000, 82.6% more than in the same period of the previous year. In June 2020 there had been for the third consecutive month a significant reduction in the number of assessments as a result of the COVID-19 pandemic.

Having increased by 0.2% compared to May (1,212 euros/m2), the median value of bank appraisals, carried out within the scope of credit applications for the purchase of housing, stood at 1,215 euros per square metre (euros/m2) in June 2021. The largest month-on-month increase was in the Algarve (1%), with the Alentejo showing the sharpest decline (-1%). In comparison to the same period in the previous year, the median value of valuations rose 8.6%, with the highest variation in the Lisbon Metropolitan Area (7.7%) and the lowest in the Autonomous Region of the Azores (0.7%).

The average appraisal value of flats was 1,339 euros/m2 in June, up 9.8% y-o-y. The highest value was observed in the Lisbon Metropolitan Area (1 599 €/m2) and the lowest in Alentejo (850 €/m2). The Autonomous Region of Madeira reported the highest year-on-year growth (10.5%), while the Autonomous Region of the Azores had the sharpest decrease (-4.8%). In relation to the previous month, the appraisal value rose 1.0%, with the Algarve showing the largest increase (2.4%) and the Autonomous Region of the Azores the sharpest drop (-3.7%). The average value of two-bedroom flats fell by two euros to €1,353/m2, as that pf three-bedroom apartment were up by 12 euros, to 1,200 euros/m2. Altogether, these accounted for 80.9% of the flat valuations carried out in the period under review.

As for houses, the median value of the bank appraisal was 1,001 euros/m2 in June, an increase of 3.8% y-o-y. The Algarve and the Lisbon Metropolitan Area (1,611 euros/m2) posted the highest values, with the Centre registering the lowest value (825 euros/m2). The Lisbon Metropolitan Area had the highest year-on-year growth (6.8%) and the sharpest fall was in the Algarve (-2.1%). Month-on-month, the Lisbon Metropolitan Area showed the only increase (0.3%), while the largest decrease occurred in the Alentejo (-2.3%). The values of two, three, and four-bedroom houses, 88.5% of the valuations, reached €949/m2 (down €8), €989/m2 (down €2) and €1,072/m2 (up €5).

According to the Bank Valuation Index, the Lisbon Metropolitan Area, the Algarve and Alentejo Litoral reported higher valuation than the average for the country (32%, 30% and 4% respectively). Terras de Trás-os-Montes and Beiras and Serra da Estrela had the lowest.

A total of 30,056 bank valuations were considered in the survey, 82.6% more than in the same period of the previous year. Of these, 19,157 were flats and 10,899 were houses. There were 631 fewer bank appraisals in comparison to the previous period, a reduction of 2.1%.

Translation: Richard D K Turner