Property Market Roundup
Mortgage demand expected to fall 20-25%
Restrictions on mortgages will create more difficulties for Portuguese families who will continue to seek homes outside large cities with poverty increasing in plain sight according to the Chairman of the Vila Galé hotel group, Jorge Rebelo de Almeida.
He was speaking at the conference ‘European Real Estate Market: Risks and Opportunities where Housing, Sustainability and Investment were the three main topics discussed.
The event which took place at the PLMJ Foundation and was partnered by Worx on Thursday, 27 October kicked off with a presentation by Samuel Duah, International director of research at BNP Paribas Real Estate who said that the European real estate market should see an investment of €240Bn in 2020 – a fall of 18% compared to 2021 with the main European markets posting falls in real estate investment in the second quarter of 2022.
Real estate bubble burst not on cards
The idea that the Portuguese real estate market is over-heated and about to burst has no grounds whatsoever.This is according to the CEO of ERA Portugal, Rui Torgal who in an interview with Jornal Económico who says that the idea of a property bubble, which “we’ve all been spooked by” as though it were the “announcement of an impending death has no grounds whatsoever today.”
He said that he didn’t believe the market was facing the kind of crisis seen in 2008 given that the context was radically different.
“The consecutive increase in house prices can be explained by a strong increase in demand from overseas investment and a lack of housing product offer, which is a structural problem nationally”, he said.
Housing offer plummets 16%
Interest rate increases are already beginning to be felt in Portugal’s residential housing market.
According to a study carried out on the national market by the real estate consultancy Imovendo, the number of properties available for sale nationwide saw a fall of 16% in the third quarter.
This amount represents a fall in the number of houses available for sale from 53,350 properties to 44,567. In relation to the like-for-like period in 2021, the fall was 30%
The sharpest fall was seen in the metropolitan area of Lisbon, with 6,000 properties for sales less than Q3 2021, and Porto, with 3,600 fewer properties (a 10% fall on the like-for-like period in 2021).
Rent rates up to 54% of household income
The percentage of income that families have to set aside to rent their homes in Portugal has risen to 54% this year — an increase of 6% on 2021 according to a study released by on-line property portal Idealista.
Madeira saw the sharpest growth (from 35% to 44%), followed by Lisbon(from 47% to 56%), Faro (39% to 47%), Setúbal (from 37% to 44%), Guarda (from 25% to 32%), and Castelo Branco (30% to 36%).
Some increases, however, were not so expressive. Aveiro (35% to 36%), São Miguel (32% to 33%) and Braga (31% to 34%), while Évora remained unchanged and Braganza went from 34% of family income to 31%.