59
59

The Market Value of Existing Homes Grows Twice as Much as for New Homes

24 September 2018

The real estate market is in the midst of a bull run. The price of existing homes grew at twice the rate of that of new builds, as they are increasingly sought-after by buyers.

The Portuguese real estate market has posted a series of positive results. According to the most recent data published by the INE, continual growth over the last nineteen quarters has pushed housing prices to the highest levels in years, stemming in large part by an increase in the cost of existing homes.

Data from the INE’s study of last week showed that, in the second quarter of this year, the price index for used homes increased by 12.6% year-on-year, surpassing the average national gain (11.2%). The price of new builds increased by 6.3% during the same period.

Although the INE’s data confirm that both new and used home prices have been gradually increasing since 2013, the price of used houses has had a greater impact on the real estate market. The price of existing homes has risen by 46.5% from the low reached during the financial crisis, while the price of new homes went up by approximately 24.1%.

According to the Jornal de Negócios, Luís Lima, the president of the Portuguese Association of Realtors and Real Estate Agents (APEMIP), stated that “the bulk of demand is concentrated in the city centres. People prefer to live in the centre of cities and prefer to live in existing homes close to urban amenities rather than living further out in a new home. The trend is defined by the nature of the existing demand.” Mr Lima also referred to the need for “new construction and new housing in areas where there is greater demand. These new developments are, as a rule, in the peripheries, where prices tend to be lower than in the urban centres.”

Of the 45,619 properties sold in the second quarter of this year, 85% were existing homes. The total value of the sales during the period between April and June reached approximately five billion euros.

Overall, the price of homes has been increasing across the board. It has been a good run for the real estate market in Portugal, as the total number of sales reached a new high.

Original Story: Observador

Translation: Richard Turner