House price increases slowing down in Portugal (2024)

The 8.7% rise seen over the first quarter of this year constitutes the least significant year-on-year price increase since the second quarter of 2021.

Further to this, the Lisbon region saw the number of sales processed hit its lowest level since 2016, aside from the dip in figures recorded during the pandemic.

According to the INE, the increase in the Housing Price Index was 2.6 percentage points below that observed in the previous quarter.

Despite this slowdown, it should be noted that the overall change in house prices (1.3% compared to the fourth quarter of 2022) increased from the figure of 1.1% recorded at the end of last year.

Fewer homes sold compared to 2022

In the first three months of the year, only 34 493 homes were sold, which is 20.8% less than in the same period in 2022, representing a reduction of 10.5%. The value of properties sold totalled €6.9 billion, which is 15.2% less compared to the first quarter of 2022.

Almost 85% of the houses were bought by families, a percentage which represents €5.8 billion. The INE states that this figure marks the lowest percentage since the second quarter of 2021.

Percentage of national buyers decrease

7.2% of the purchases made were from international buyers with a tax residence outside of Portugal. This figure rises to 12.7% when looking at value transacted.

INE data indicated that in the first three months of 2023, “housing purchases by buyers with tax domicile in the National Territory decreased by 21.9% year-on-year, to a total of 32 001 units”, that is, 92.8% of the total number of transactions, “the lowest relative weight in the series starting in the 1st quarter of 2019″.

There was a slowing down in terms of the number and value of property sales over the last six quarters beginning from the second quarter of 2022.

Looking at the regional analysis, the highest number of houses was sold in the Northern region of Portugal at the beginning of the year (9924 houses). “In the Lisbon Metropolitan Area, 9761 transactions were registered, which, except for the 2nd quarter of 2020, due to the influence of the COVID-19 pandemic, constitutes the lowest number of sales in this region since the 4th quarter of 2016″, notes the INE.

House prices still high despite fall in transactions

Despite fewer transactions taking place, property prices in the capital remain high. “Between January and March 2023, the Lisbon metropolitan area concentrated 40.6% of the total value of housing transactions, followed by the North with 23.5%”, with transaction values ​​being the lowest for both of the past two years.

The INE did show, however, that “in the 1st quarter of 2023, all regions recorded a year-on-year reduction in the number and value of accommodation transactions”.