Housing Prices to Increase by an Average of 5% in 2018

2 December 2017

A survey of property owners revealed that price increases of at least 6% per year are expected up to 2022 and demand for houses is higher than the existing supply in Lisbon, Porto and the Algarve.

House prices are expected to rise by an average of 5% over the next 12 months, according to a survey of real estate owners, developers and agents conducted by Confidencial Real Estate and the Royal Institution of Chartered Surveyors (RICS) in October.

“The residential property market is benefiting from an increase in new lending activity, which, combined with the imbalance between supply and demand, is causing prices to approach pre-crisis levels,” Ricardo Guimarães, director of Confidencial Imobiliário, stated, noting that the Residential Price Index used in the analysis “is now less than 1% below the maximum recorded in 2010”.

Analysing regions such as Lisbon, Porto and the Algarve, the ‘Portuguese Housing Market Survey’ also revealed that the survey’s respondents have highly positive long-term views of home prices, forecasting an annual average growth of around 6% p.a. over the next five years.

Purchase of Houses for Tourism

“Operators’ confidence in the market is quite high, as the price growth movement is not only based on increased funding but is also supported by the dynamics of other sources of demand, such as short-term rentals,” the Ci’s director explained.

Demand for house purchases continued active in the regions analysed by Confidencial Imobiliário and RICS (Lisbon, Porto and Algarve) up to October, and was a slight reduction in the supply of houses on the market on every region.

“The Portuguese economy continues to show one of the strongest growths in Europe, with GDP growth accelerating in the third quarter of this year,” Simon Rubinsohn, chief economist at RICS, said. “Consumers saw their real incomes rise as inflation remained low and the unemployment rate at near lows of almost a decade. After years of deleveraging, households were able to increase spending by helping to boost the recent strength in the market residential,” he concluded.

Original Story: Expresso – Conceição Antunes

Photo: Luís Barra

Translation: Richard Turner