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Demand, and Prices, Rise in Oeiras, Amadora and Odivelas
22 June 2018
The municipalities on the outskirts of the city of Lisbon are now following the trend witnessed in the capital’s housing sector. Demand is increasing along with prices, and construction is enjoying a recovery.
“We are living in a very complicated time because domestic and external demand are joining forces […]. More and more foreigners are looking at Portugal and, at the moment, there is a lack of capacity in Oeiras, at least there is an almost total inability to respond to the increasing demand. These days a house can be sold in 24 hours,” the mayor of the city, Isaltino Morais, told Lusa.
According to the mayor, the area requires investment in new construction to respond to the “lack of housing in the Lisbon Metropolitan Area [AML], regardless of the demand generated by tourism and local accommodations,” since no new housing has been built in the last five years.
“We are currently witnessing the highest level of real estate speculation in the last hundred years. Housing prices go up every day, there are few projects – two or three – under construction, and within a month they increase the value of houses by 20% because demand far outstrips supply,” Mayor Morais said. He added that he expects the market to reach equilibrium within two to three years since construction has been accelerating in the last two years.
Until that equilibrium is achieved, “the price of housing will continue to rise, both for sales and rentals, placing much of the market out of reach for Portuguese families,” the mayor of Oeiras argued.
The municipality of Amadora, which is also seeing a generalised increase in prices, is also witnessing a resumption in the construction of developments that had been approved in earlier times but had never gone forward, the mayor of the municipality, Carla Tavares, stated.
“The standard of living [of the Portuguese] is improving which is facilitating the dynamization of the local real estate market, for both sales and rentals,” she said, noting that a four-bedroom property now costs around the 900 euros per month, up by roughly 100 euros.
Buying a similar home costs around €250,000, up from approximately 200,000 euros.
Without enough data to be able to link the existing demand for housing in Amadora with the market in Lisbon, Mayor Tavares revealed that “among workers and working-age people, more than 50% have a daily commute to the city of Lisbon,” highlighting the municipality’s “easy access” to the capital.
Since Amadora, at only 24 square kilometres, is the smallest municipality in the AML, “there is not much more room to grow” regarding the construction of new housing, she stated.
The region, she stressed, is already “densely populated,” having about 176,000 inhabitants, so it is now important “to rehabilitate and upgrade the areas in the territory that can attract investment to the city.”
Odivelas, which is undergoing a similar dynamic, has been “a constant pole of attraction for families,” Susana Santos, who acts as a councillor for housing, told Lusa. The councillor added, justifying the growth in demand by the region’s proximity to the AML along with its easy access, the existence of a wide range of public services and “quality” housing developments, investment in education, and above-average safety levels compared to the AML.
“Rising demand always places pressure on prices,” Susana Santos said, adding that “in the last three years there has been a 12% increase in housing prices, which is slightly above the average for the AML.”
Referring to the “undeniable” attractiveness of the municipality of Odivelas, the council member said that investments in the housing sector have risen in response to demand, “some of which stem from projects that were initially given permits before the crisis, and others that are completely new.”
According to the mayor, one of the concerns for the municipality of Odivelas has to do with the “scarcity of rentals, which is historically a less dynamic market than that for sales, especially during periods of higher growth in construction.”
Original Story: Jornal Econômico
Translation: Richard Turner