Portugal property price correction predicted (2024)

In Portugal, the residential property market remained strongthroughout 2022, but as interest rates rise, so does the risk of pricecorrection which has led to Moody’s predicting that house prices could fall byup to 3% in 2023.

By TPN, in News, Portugal, Property · 11 Jan 2023, 19:05 · 0 Comments

Portugal property price correction predicted (1)

“The risk of correction in house prices has increased asinflation accelerates, interest rates rise and economic growth slows down”,highlights the financial rating agency, admitting that, in some markets thereare “great risks of price corrections”, according to ECO.

With regard to Portugal, Moody's estimates that the growthin house prices should settle at 13.9% in 2022. And in 2023? The rating agencypredicts that house prices could remain stable at 1%. But it also admits ascenario of price correction, in which prices may fall by up to 3%.

Moody`s perspectives point to "economic growth slowingdown worldwide in 2023", with "high inflation, geopolitical changesand financial market volatility harming families and companies", with"a substantial risk of new shocks in the future".

But with regard to banking, the rating agency admits thatfinancial institutions could benefit from "solid profits" in 2023,with rising interest rates and reinforced balance sheets counterbalancing theglobal economic slowdown.

"Global banks will be protected from rising bad debtsin 2023 by rising interest rates and solid reserves and the outlook for thesector remains stable", says Moody`s Investors Service in the reportreleased in early December.

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