Portugal Housing Market Growth Sees Slowest Pace Since 2021, With Lisbon Breaking the Trend
Portugal Housing Market Growth is witnessing a noticeable slowdown. The once soaring housing prices are now experiencing a drop, with a 7.6% rise in the last year alone, making this the most significant homologous slowdown since June 2021. A standout in this period is Lisbon, which reported an increase above the country’s average for the first time in three years, a pattern shift of substantial interest to investors and homeowners alike.
The slowdown in Portugal’s housing market is not a sudden occurrence but a trend observed over three consecutive quarters. The National Statistics Institute (INE) offers some insightful data on this trend. According to their reports, the median price of family accommodation in Portugal was 1,565 euros per square meter in the first quarter, which is approximately 7.6% above the prices seen a year earlier. This figure compares to a year-on-year rate of 10.7% in the fourth quarter of 2022. You can find more details on their website.
Breakdown of the Portugal Housing Market Growth
For better context, it’s important to note that in the second quarter of 2022, the year-on-year rate of change in median prices in Portugal reached a staggering 17.8%. This rate has been in a consistent decline ever since. This downward trend, however, doesn’t tell the whole story. The country’s housing market is diverse, with different regions and cities painting their own pictures of growth and slowdown.
Twenty of Portugal’s NUTS III sub-regions have seen a growth in median housing prices compared to the same period last year. The regions leading this growth include Lezíria do Tejo with a 17.5% increase, the Algarve with a 16.6% increase, Leiria with a 15.9% increase, Cávado with a 15.6% increase, and the Lisbon Metropolitan Area with a 15.2% increase Check out Lezíria do Tejo for a deeper understanding of this region.
When focusing on metropolitan areas of Lisbon and Porto, which includes 17 municipalities with over 100,000 inhabitants, 14 of these municipalities exhibited year-on-year rates of change higher than the national average. Loures stood out with a significant increase of 26.5%.
Lisbon Defies The National Trend
The city of Lisbon deserves a separate mention. Despite having one of the lowest year-on-year changes of 9.2%, it managed to achieve a year-on-year rate of change higher than that of the country for the first time since the first quarter of 2020. You can read more about Lisbon and its metropolitan area here.
For potential homeowners and investors, the slowdown in Portugal’s housing market growth presents both challenges and opportunities. A slower growth might seem less attractive for investors looking for a quick return on investment, but it also means more affordable housing prices for first-time buyers and locals.
This trend, combined with the ongoing success of Portugal’s Golden Visa Program and the rise in homes for sale in Q2 of 2023, presents a unique picture of the housing market. Whether you are an investor, a foreigner planning to get a mortgage in Portugal, or a potential homeowner, understanding the dynamics of the Portugal housing market growth is crucial. Here is a guide for foreigners planning to get a mortgage in Portugal.
FAQ
1. What is the current growth rate of the Portugal Housing Market?
The growth rate of the Portugal Housing Market has slowed down to 7.6% as of last year, which is the slowest growth rate since June 2021.
2. Which area in Portugal is experiencing the highest growth rate?
Among Portugal’s NUTS III sub-regions, Lezíria do Tejo has the highest growth rate with a 17.5% increase in housing prices.
3. How is Lisbon’s housing market performing compared to the national average?
Lisbon’s housing market growth rate is lower at 9.2%, but it is above the national average for the first time since the first quarter of 2020.
4. How have the housing prices in Portugal changed over the past year?
The median price of family accommodation in Portugal was 1,565 euros per square meter in the first quarter, which is about 7.6% above the prices from a year earlier.
5. What does the slowdown in Portugal’s housing market growth indicate for potential homeowners and investors?
The slowdown in growth might seem less attractive for investors looking for a quick return on investment, but it also means more affordable housing prices for first-time buyers and locals.