Property Sales in Portugal Have Doubled in the Last Decade

Portugal's real estate market has undergone a significant transformation, marked by a remarkable surge in house sales over the past decade.

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Over the last ten years, property sales in Portugal have more than doubled, demonstrating the rapid expansion of the country’s housing market. The soaring number of new mortgages, bank appraisals, and housing loans further evidences this growth. In this article, we delve into the factors fuelling Portugal’s property market and explore the latest INE data, released at the end of June, which has been a crucial resource for our analysis.

In recent years, the Portuguese real estate market has shown remarkable resilience and stability despite high interest rates and lofty house prices. Access to housing has become a challenge for many residents, but the market continues to thrive, fostering investor confidence and activity. Let’s take a closer look at the figures.

How Indicators Have Evolved: 2014-2024

Home Sales

Housing transactions have more than doubled from 15,000 in the first quarter of 2014 to 33,000 in quarter one of this year—a rise of 114.6%. This highlights the sky-high demand within the market, which presents exciting opportunities for property investors.

Bank Appraisals 

Portugal has seen a 330.7% rise in bank appraisals over the past decade, driven by the growing demand for real estate. In 2014, 7,087 appraisals were carried out, which rose to 30,523 in the first few months of this year. This significant appraisal growth is a clear indicator of the market’s potential and should inspire optimism in investors.

New Housing Loans

One of the most significant increases is the rise of new home loans. In ten years, loans rose by 920.2%. The first quarter of 2024 saw 28,694 new housing loans, up from just shy of 3,000 in 2014.

New mortgage credit contracts

In parallel with bank assessment growth, there have also been many new mortgage credit contracts. Idealista, however, explains that the number of mortgage loans is generally lower than the number of bank appraisals in each period, as not all appraisals are converted into credit granting. Occasionally, there may be a more significant number of credit contracts than evaluations due to the time lag between the moment of assessment and the effective start date of the credit.

Factors Influencing Real Estate Dynamics

The remarkable increase in property sales across Portugal can be attributed to several key factors. One primary driver is the growing demand for luxury real estate and investment properties, especially in coastal areas and tourist hotspots. The market remains robust despite the recent termination of popular foreign incentives like the Portugal Golden Visa program. Experts predict investment volume to increase by up to 15% compared to 2023, underscoring the sector’s resilience and attractiveness.

According to UNCTAD’s World Investment Report 2023, Foreign Direct Investment (FDI) flows to Portugal reached USD 9.1 billion in 2022. This influx of capital has bolstered the real estate market, creating even more fertile ground for domestic and international investors.

Portugal’s booming tourism industry is another crucial factor. The country welcomed over 30 million visitors in 2023, setting new records with 77 million overnight stays. This surge in tourism has driven demand for short-term rentals and vacation homes, further fueling property sales and appraisals.

Positive Indicators for Investors

The significant rise in property sales, bank appraisals, and new housing loans across Portugal is excellent news for investors. The strong demand for properties and the sustained influx of foreign investment highlight the market’s potential for high returns. Robust market activity will continue to drive growth, producing attractive, high-yielding opportunities for investors.

Looking Forward

Portugal’s real estate market has demonstrated remarkable growth and resilience over the past decade. Despite high interest rates and housing accessibility issues, the market continues to thrive, driven by strong demand for luxury properties, robust foreign investment, and a booming tourism industry. For investors, the significant increase in home sales, bank appraisals, and new housing loans signals a promising landscape of opportunities. As the market expands, Portugal remains an attractive destination for real estate investment, offering substantial returns and long-term value.

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