Frozen prices in the Portuguese property market for now? How could the future of the real estate industry in Portugal be?

There is already a lot of talk about this Corona virus crisis, and opinions are as different as the codfish dishes in my country, they differ from region and political colour as well as from the flag interest of each one who talks about it.In our opinion, it will not completely disengage the real estate market in Portugal, neither that of other countries. In our opinion, it will not completely disengage the real estate market in Portugal, neither that of other countries.  However, as happened after the 2008 financial crisis, it is very likely that gradual changes will take place. These changes will affect supply and demand, the main factors determining the price - whether it is the purchase price or the rental price.

Let´s start at the beginning of our review

After 20 years of internal migration to the expanding cities, eight years of tourist immigration and second residence in Central and Northern Europe. Following a wave of Residence Visa Investment from China, Brazil, Turkey and the Middle East, demand in the real estate market has not slowed to date. Therefore, the lack of supply is still felt in the demand that rose in the months of January and February and that made the 1st Quarter of 2020 have an increase compared to 2019 (year of all records in Portuguese real estate) of 11.4% in real estate transactions.

Portugal is the European country with the lowest average of new housing construction per 1,000 inhabitants, reveals a study by the German institute IFO, quoted by Jornal de Notícias on 17.02.2020. The study analyzed 19 European countries and found that in Portugal there is an average of less than 1.5 new dwellings per thousand inhabitants, while in Finland, Austria and Switzerland there are more than 6 new houses built annually per 1,000 inhabitants.

On average, in Europe about 4 new housings are built per year per thousand inhabitants. Portugal, which is at the bottom of the table of 9 countries, goes along with Italy and Spain, a country that at the beginning of the decade was facing a sudden correction in the real estate market.

Text: Paulo Lopes