How the real estate market in Portugal? Dez/2017

How the real estate market in Portugal? 

Demand unchanged in December

• Demand remains steady

• News sales instructions fall sharply

• Prices continue to pick-up across all regions

The December 2017 RICS/Ci PHMS results show demand was static as the year drew to a close, but the shortage of new sales instructions continues to underpin price growth across all regions. In the lettings market, rent expectations hit a fresh high (series formed in 2011) as supply constraints continue to exert upward pressure on rents.

Focussing on the sales market, new buyer enquiries were virtually flat over the period, with a net balance of just +4% reporting a rise. This represents the softest reading since December 2015, although seasonal patterns are very likely, at least in part, responsible for the flattening in demand. Meanwhile, the flow of new instructions coming to market deteriorated noticeably, as a net balance of -38% of contributors noted a fall in new listings. What’s more, the decline was widespread across all regions covered by the survey (Lisbon, Porto and the Algarve).Capturar

Alongside this, the number of agreed sales edged higher, with the rate of increase (in net balance terms) matching that found over the previous month. Going forward, sales are expected to continue to rise modestly over the coming three months. Respondents across the Algarve returned a more optimistic assessment on the near term outlook for sales volumes relative to Lisbon and Porto.

With supply continuing to decline, even a steady trend in demand was enough to drive further house price growth across all regions. Over the coming twelve months, respondents envisage house prices rising 4.5% at the headline level. Further out, at the five year horizon, house price inflation is anticipated to accelerate to average around 5.5% per annum.

The National Confidence Index (a composite measure encompassing near term price and sales expectations) registered a reading of +31 in December, a slight easing from +34 last month. Even so, this indicator continues to signal a comfortably positive trend is expected for both sales and prices through the opening stretch of 2018.

In the lettings market, a net balance of -55% of respondents reported a decline in new landlord instructions. This equals the most negative reading on record, and came alongside still significant growth in demand. On the back of this, rent expectations for the coming three months hit a fresh record high.

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