Sep 30, 2022
By António Barbosa

Portuguese buyers lead the charge as house prices rise

There is a persistent misconception that Portuguese do not buy real estate in Portugal, and that foreigners are driving the real estate market. However, when we take a closer look, the numbers indicate differently. In fact, according to the Institute for National Statistics (INE), approximately 93.6% of recorded residential purchases are by nationals and only 6.4% accounts for foreigners’ purchase. As well, the following statistics from INE provide a clear picture that the Portuguese residential market is booming at a very fast pace and a sudden drop is hard to imagine.

In the referenced quarter, non-resident investors were responsible for 6.4% of the total number of transactions (2,783 dwellings) which represents an increase of 2.0% over the previous quarter, andcorresponds to 11.9% of the total value transacted. In this data, the European Union category corresponded to 3.6% and the remaining countries to 2.8%.

In the second quarter of 2022, the Housing Price Index (IPHab) increased by 13.2% year-on-year, and 0.3 percentage points (p.p.) above the previous quarter. Notably, the increase in property prices was more expressive in existing housing with 14.7% compared to 8.4% in new housing.

Compared to the first three months of the year, the IPHab increased by 3.1% (3.8% in the 1st quarter of 2022). Here too, the rate of change in the index for existing dwellings (3.9%) exceeded that recorded for new dwellings (0.6%).

Between April and June 2022, 43,607 homes were sold for a total value of 8.3 billion euros, which represents an increase, compared to the same period of the previous year, of 4.5% and 19.5%, respectively. By category, existing housing transactions reached 35,742 units, corresponding to a year-on-year increase of 1.8%. In new housing, the rate of change was higher, 18.9%, totaling 7,865 transactions.

In total, in the period under analysis, 38,181 homes were acquired by families, representing 87.6% of the market transactions or 7.2 billion euros.

The value of the properties transacted stood at 8.3 billion euros, which accounts for 19.5% more than the value in the same quarter of 2021. From this total transaction value, 6.3 billion euros corresponded to transactions of existing housing – 16.8% increase compared to the same period in 2021 – and 2 billion euros were related to new housing transactions (29.0% year-on-year increase).

Thus, the value of these transactions increased by 2.5% in the second quarter of 2022 compared to the previous quarter. In this period, the growth observed in the value of transactions of existing dwellings surpassed that of new dwellings, by 3.0% and 1.2%, respectively.

António Barbosa
REALTOR® at Infinite Solutions

Source: INE (Institute for National Statistics)