The latest data on property in Portugal shows dramatic year-on-year increases in rental prices, although comparisons with recent months show the market might be taking a bit of a dip. Going forward it will be important to focus on quality, value and resilience.
Data from Imovirtual shows that rental prices in Portugal rose 38% in January compared to the same period last year, to an average of €1,445 euros. Sales also increased by 7.8% on average. However, compared with December 2022, the average value of income declined by 8.8% and sales value decreased by 2.8%.
Lisbon remains the star performer, maintaining an average rental income above €2,000 euros, while Porto, Madeira, Faro and Evora all managed to stay above the €1,000 euro mark.
(House prices are the most expensive in Lisbon at €635,441 euros, followed by Farro at €581,112 euros. At the other end of the scale, Guarda and Portalegre are the cheapest at €109,534 euros and €115,435 euros respectively.)
The data highlights the impressive strides made by the real estate rental market in Portugal over the past year. That said, like many other places, the property market is starting to level out. Real Estate experts at Moody’s have predicted that real estate prices might fall by as much as 3% in Portugal this year.
Market correction
Inflation stands at around 10%, driven largely by the war in Ukraine. With interest rates on the rise throughout Europe in an attempt to control inflation, buyers are finding it more difficult to get into the market.
Moreover, the sector is undergoing a period of correction after a stellar couple of years. Portugal’s property market was boosted by foreign investment from the country’s famous Golden Visa scheme, but with last year’s geographical restrictions on residential property investments in prime areas such as Lisbon and Porto, much of the upward pressure on prices is lessening.
That said, Portugal’s downturn looks to be mild, especially in comparison to other places. The UK, for example, is bracing itself this year for a 15% fall in property prices from peak levels.
A bright future
Both the rental and the purchasing markets are expected to remain robust over the next year. Portugal’s overall economy remains strong with people of all ages being drawn to the country by a combination of culture, lifestyle and weather. Meanwhile, Portugal’s digital nomad visa, which offers an opportunity for footloose digital professionals to make a home in the country, adds to its growing reputation as a location for affluent, upwardly mobile professionals.
This, and the country’s continuing status as a hotspot for tourism, will continue to support the real estate market now and into the future. Whether you’re looking to benefit from rental income, market appreciation or just to have a holiday home that also generates an income, Portugal remains one of the most attractive destinations in Europe.
Contact us today to discover our available properties in Portugal.
