How is the real estate market in Portugal and Algarve?

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How is the real estate market in Portugal and Algarve?

The latest data from INE and CI (Confidencial Imobiliário) indicates an increase, albeit very timid, in both average property valuations and property values in the last quarter of 2023.

We can also understand and conclude that despite the drop in the number of transactions in 2023 and despite the high interest rates, property values remain stable and in January 2024 had an average increase of almost 1%. For the Algarve, the median valuations made by the “bank/LTV” were around 2,071€/m2 for flats and 2,139€/m2 for houses.

Declines in the number of transactions and sales in 2023!

The context characterised by high interest rates has conditioned demand for house purchases in 2023, which has resulted in a drop of between 15/25% in sales nationwide.  Around 131,000 homes were sold in Portugal last year.

The Algarve was among the most penalised areas in terms of the drop in demand in the first quarters of last year, which was reflected in sales price adjustments in recent quarters. However, despite the drop in the number of transactions, there was a general price increase of around 12 per cent in 2023.

January 2024 saw a 0.9% monthly increase in house prices

In January, house prices in Portugal rose by a average of 0.9% compared to December 2023, thus continuing the cycle of smooth monthly rises that predominated in the second half of last year.

In year-on-year terms, prices grew by 12.1% in January, keeping appreciation levels in this time horizon stable at around 12.0%. Remember that in December 2023, the year-on-year rate of change was 11.8 per cent, crowning a year marked by a slowdown in the pace of house price rises. As a result of this slowdown, the year-on-year increase recorded in the last month of 2023 was 6.9 percentage points lower than at the end of 2022 (18.7 per cent).

According to data from the SIR-Residential Information System, houses were sold in mainland Portugal for an average price of 2,396€/m2 in January 2024, considering an accumulated period of three months. New homes reached an average value of 3,656€/m2 in transactions carried out during this period, while used homes had an average value of 2,243€/m2.

Despite the positive signs, the resilience of the property market and the fact that the prices of the properties sold have not fallen, the truth is that with the measures taken in the new housing law (see more here) there has already been an increase in the supply available on the market and it is possible to see that the average time it takes to sell a property is increasing, from 30 days in 2021 and 2022 to around 90 to 120 days at the end of 2023 and in 2024.

I’ll be monitoring the market and will leave data and information here so that you can follow its evolution. Remember that this data is at a macro or general level and that each “house is a case”, so if you’re thinking of selling your property you need to analyse it carefully at a local and micro level.

Please don’t hesitate to get in touch if you have any property questions.

Artur Cruz

Your trusted estate agent

Source: CI (Confidencial Imobiliário) and INE

Author: Artur Cruz

I’m a real estate agent several times awarded in my career, “Centurion Producer”, “Hall of Fame”, real estate agent also awarded in Las Vegas, USA at one of the biggest and more important real estate conventions in the world. East Algarve “Top Producer” in real estate.

View all posts by Artur Cruz >

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