Increase in property product will cool simmering housing market
Increasing the amount of product in the Portuguese property market should cool rising prices and avoid a property bubble says estate agents ERA.
In an interview with news agency Lusa, João Pedro Pereira from the Executive Real Estate Commission said, “Many construction decisions taken in recent years and that are being taken this year will finally result in new build being put on the market which are welcome and will slow the growth in prices in the most expensive and sought after areas and provide a better quality of product in Portugal.”
Estimating the “appearance of more product in the market if current legal and tax regimes are maintained,” the specialist says that in historic areas product continues to come onto the market as a result of refurbishment of existing stock since “there is no space for new build.”
João Pereira rules out a housing market bubble, adding that this is a notion put forward by those who are “not taking into account the fact that product in the real estate market takes many years to adjust to demand” given the time between the decision to build and the time to complete projects.
“The adjustment in product will compensate the increase in demand because, unlike other products, in the real estate market takes two or three years to be felt,” he concluded.