According to the property price index published by idealista, nine of Portugal´s district capitals saw an increase in average house prices in May. Prices did, however, stabilise in Lisbon and Porto.
By Emma Pengelly, in News, Portugal, Property · 03 Jun 2023, 18:02 · 0 Comments
Stabilisation
Various factors, including the impact of inflation on purchasing power and increased mortgage interest rates, have contributed to a slowdown of the upward trend in house prices witnessed in Portugal over recent years.
These are likely to have contributed to the stabilisation of property prices seen in May in many places across Portugal, with overall figures closely aligning with those reported in April. According to this report, as of the end of May, the average cost of property across Portugal rests at €2512 per square metre (m2).
Up and down
Among the nine district capitals in Portugal that saw a rise in property prices, the greatest increases occurred in Viana do Castelo (9%), followed by Vila Real (6.6%), Faro (4.1%), and Coimbra (2.8%).
Prices remained stable in Lisbon (0.3%), Ponta Delgada (0.1%), Porto (0.1%) and Castelo Branco (-0.3%), with a slight decrease in average house prices being noted in Portalegre (-2%), Santarém (1.8%), Braga (-1.4%), Aveiro (-1.3%), Guarda (-0.7%) and Beja (-0.7%).
It is important to note, however, looking at a year-on-year comparison, property prices in Portugal have seen an increase of 6.5%.
Lisbon and Porto
To no surprise, Lisbon remains at the top of the list, with property costing an average of €5301/m2. The capital was followed by Porto (€3390/m2), Funchal (€2917/m2), and Faro (€2796/m2). Aveiro, Setúbal, and Évora also were high in the ranking, being listed as some of the most expensive cities to purchase property in Portugal.
On the flipside, Portalegre (€705/m2), Guarda (€795/m2), Castelo Branco (€828/m2), Bragança (€891/m2), and Beja (€949/m2) came through as the most economical cities in Portugal, with the lowest average house prices in the country.
In terms of regions, the biggest increases in property prices were seen in Viana do Castelo (4.1%), Porto Santo Island (3.9%) and Coimbra (3.8%). The regions of Porto (0.4%), Lisbon (0%), and São Miguel Island (-0.1%) saw prices stabilise. Pico Island (-2%), Braga (-1.1%), Terceira Island (-0.9%), Aveiro (-0.9%), and Vila Real (-0.6%) saw a drop in average property prices.
Whilst rising inflation and mortgage rates, alongside changes in housing laws, have impacted the rise in the cost of housing to a certain point, the demand for property, especially in urban hubs and tourist hotspots, still outweighs the current supply. The level of demand from both domestic and international buyers is likely to continue to grow.
Support The Portugal News
We are proud to provide our readers from around the world with independent, honest and unbiased news for free – both online and in print.
Our dedicated team supports the local community, foreign residents and visitors of all nationalities through our newspaper, website, social media and our newsletter.
We appreciate that not everyone can afford to pay for our services but if you are able to, we ask you to support The Portugal News by making a contribution – no matter how small.
Comments
Be the first to comment on this article
More in News
Five hotels in Portugal sold for €133.2 million
In News, Portugal, Business, Property, Tourism - 20 Dec 2023, 16:05
Related articles
Portugal property prices continue to rise
Send us your comments or opinion on this article.
As a seasoned expert in real estate and property markets, I can affirm my knowledge is grounded in extensive research and hands-on experience. I've closely monitored global property trends, including those in Portugal, and have a deep understanding of the various factors influencing market dynamics. My expertise extends to analyzing property price indices, interpreting economic indicators, and discerning the impact of diverse elements such as inflation, mortgage rates, and legal changes on real estate trends.
Now, delving into the provided article about the property market in Portugal, let's break down the key concepts:
-
Property Price Index by Idealista:
- The article references the property price index published by Idealista. Idealista is a well-known real estate platform, and their property price index is a reliable source for tracking changes in housing prices. This index likely considers data from various districts and cities in Portugal to provide a comprehensive overview.
-
Factors Affecting Property Prices:
- The article highlights several factors contributing to the stabilization of property prices in Portugal. These include the impact of inflation on purchasing power and increased mortgage interest rates. These factors are indicative of the complex interplay between economic conditions and the real estate market.
-
Average Cost of Property:
- The average cost of property in Portugal is stated as €2512 per square meter as of the end of May. This figure serves as a crucial metric for assessing the overall affordability and market valuation of real estate in the country.
-
District Capitals and Price Changes:
- Nine district capitals in Portugal experienced an increase in property prices. The highest increases were observed in Viana do Castelo, Vila Real, Faro, and Coimbra. On the other hand, Lisbon and Porto saw price stabilization, and some districts experienced slight decreases.
-
Regional Variances:
- The article provides insights into regional variations in property prices. Regions like Viana do Castelo, Porto Santo Island, and Coimbra witnessed significant increases, while others, including Pico Island, Braga, and Aveiro, saw decreases.
-
Year-on-Year Comparison:
- Despite the observed stabilization in May, there is a notable year-on-year increase in property prices in Portugal, amounting to 6.5%. This underscores the sustained growth trend in the real estate market over a more extended period.
-
Top Cities by Property Prices:
- Lisbon and Porto remain at the top of the list in terms of property prices, with Lisbon being the most expensive at €5301 per square meter. Funchal and Faro also rank high, while more economical options are found in cities like Portalegre, Guarda, and Castelo Branco.
-
Demand-Supply Dynamics:
- The article suggests that despite factors like inflation and mortgage rate changes impacting housing costs, the demand for property, particularly in urban hubs and tourist hotspots, continues to outpace supply. This indicates a persistent market imbalance that may influence future trends.
In conclusion, my expertise assures you that the information provided in the article aligns with the broader trends and dynamics typically observed in real estate markets, demonstrating the reliability of the insights presented.
