Navigating the Dynamics of Portugal’s Real Estate Landscape: A Comprehensive Look at 2023 and 2024

Portugal's

The residential Portugal’s Real Estate market in Portugal is exhibiting signs of deceleration, as evidenced by declines in sales and transaction values during the third quarter. According to data from the National Institute of Statistics (INE), this trend is pervasive across all regions, with more pronounced decreases observed in the Algarve and Greater Lisbon.

Southern region Portugal’s

In the Southern region and the Lisbon Metropolitan Area, significant reductions were recorded, with sales dropping by 27.9% and 25.3%, and transaction values declining by 18.9% and 14.8%, respectively. The North led in transactions, representing 30.1% of the total, while the Lisbon Metropolitan Area had 27.2%, marking a 2.3-percentage-point decrease from the previous year.

Examining transaction amounts Portugal’s

Examining transaction amounts by region reveals noteworthy patterns. Greater Lisbon contributed 40.8% of the total, amounting to around €2.9 billion, reflecting a year-on-year reduction of 1.3 percentage points. In the North and Centre, there were increases in values transacted compared to the previous year. The Algarve represented 11.8%, and the Alentejo 4.6% of the total.

The median value of the bank appraisal of dwellings in November decreased to €1530 per square meter, showing a €6 drop compared to October. However, in comparison to November 2022, there was a 5.6% increase. Regional differences were notable, with the Alentejo registering the most significant increase and the Algarve experiencing the largest decrease.

In certain municipalities, houses were worth less compared to the previous year, with Porto experiencing the most substantial reduction (€289 less). Lisbon had a more moderate decrease (minus €4). While Lisbon and Porto continue to lead in values, an analysis by municipality reveals variations.

Entering 2024, Portugal’s grapples

Entering 2024, Portugal grapples with the persistent challenge of housing shortages, impacting 86,000 families. The approval of the More Housing package by the outgoing government raises uncertainties, particularly with the March 2024 elections. The PSD has expressed its intention to revise Law 56/2023, regulating the program, if victorious in the elections.

The commercial Portugal’s real estate

The commercial real estate sector for 2024, as per Deloitte, emphasizes the residential and hospitality sectors for domestic investors. Globally, the digital economy and construction-to-lease take the lead. The international scenario is marked by pessimism, reflected in negative macroeconomic indicators and concerns about GDP growth and interest rates.

The Israel-Hamas war

The Israel-Hamas war and geopolitical uncertainty contribute to a cautious stance, leading investors to postpone decisions. Despite global concerns, Portugal maintains domestic optimism, sustaining asset stability.

Immediate challenges encompass construction costs, permitting, financing, and political instability. Sustainability emerges as a critical factor, with investors considering ESG (Environmental, Social, and Governance) criteria in investment decisions. Digitalisation and operational effectiveness gain prominence, indicating a shift towards more sustainable and efficient practices.

In summary, Portugal’s real estate market confronts significant challenges, yet resilience is apparent. Adapting to global trends, prioritising sustainability, and addressing emerging housing needs will be pivo

Portugal’s Housing Crisis: A Generation on the Brink

Portugal is in the grip of a severe housing crisis that has seen the home ownership rate among its youthful demographic plummet by a staggering 50% across two generations. The country’s young populace, many of who are beginning to consider migration as the only viable option, find themselves at the mercy of a stark incongruity: some of the European Union’s lowest salaries juxtaposed against its highest rent and house prices.

The Human Face of the Crisis

The crisis is not merely a statistic but a living reality for many young Portuguese, such as Diana, a 31-year-old who continues to live with her parents due to the high cost of housing. It’s also embodied by individuals like Beatriz, a 24-year-old who had to forsake her academic pursuits to work full-time in a bid to afford her rent. The struggle for housing and financial independence is a common narrative among Portugal’s younger generation, pushing many to contemplate leaving their homeland in search of greener pastures.

Roots of the Crisis

Tracing the roots of this housing crisis leads back to the 2008 financial crisis. In an attempt to stimulate its economy post-crisis, Portugal sought to attract foreign investment. Consequently, the country implemented policies like the ‘Golden Visa’ schemes, which inadvertently led to a rapid escalation in housing prices. The fallout has been a housing market largely disconnected from the average Portuguese income, thereby exacerbating the plight of the young populace.

Political Implications

As the crisis intensifies, it has spilled over into the political arena. The looming parliamentary elections in March 2023 have seen this issue take center stage, with young people in Lisbon voicing their struggles and concerns about the future. The housing crisis presents a pressing challenge for the upcoming government, with the country’s future quite literally hanging in the balance.

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