Real Estate: is the boom over?

“The real estate boom” over the past few years are “over” reports CNN Negócios with prices falling up to 3% in Portugal this year.

The forecast is from the ratings agency Moody’s which points to a variation in residential real estate of between -3% and 1% in the national housing market.
However, despite the increase in inflation and interest rates, the Portuguese housing market has remained resilient and Moody’s believes that house prices will remain stable in 2023, although it admits that there is a rising risk of some correction in the market.
In a report published on Tuesday, the ratings agency outlines a base-scenario for Portugal, suggesting a variation of between -3% and +1%.
“The real estate booms are over, with some markets at risk of facing significant price corrections, but we do not foresee falls of the order experienced during the global financial crisis”, states Moody’s.
Moody’s adds: “House prices continue to be robust despite the fall in consumer confidence”, however”, the risk of a correction in house prices has increased because of higher inflation and interest rates and a slowdown in economic growth”.
Looking at house prices in various countries, Moody’s notes that in Portugal in 2021 house prices rose by 9.1% and in 2022 rose by 13.9%. Between 2019 and 2021, however, the average increase in houses was only around 1%.
According to ECO, various estate agents and real estate analysts expect an increase in house prices and rents in 2023 but a reduction in the number of transactions.