How’s real estate market?

How’s real estate market?

Price growth gains momentum

  • Price growth accelerates

  • Sales instructions fall

  • Demand and sales rise at a solid rate

The April 2017 RICS/Ci PHMS results point to prices rising at the fastest monthly pace since the survey was formed in 2010 (in net balance terms). This rising pressure on prices is in part linked to the first reported fall in new instructions since December 2016.

A similar picture is depicted in the lettings market, where strong demand is being met by a continued decline in new landlord instructions. New buyer enquiries again posted a solid increase during April, as a net balance of 35% more respondents noted a pick-up in demand. Furthermore, since the start of 2017, demand growth has been consistently stronger than that reported throughout much of 2016.

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Sales growth also remains firm, with respondents citing an increase in agreed sales for the sixteenth month in succession (albeit at a marginally slower pace than in March). When disaggregated, transactions continue to rise smartly across all three regions covered by the survey (Lisbon, Porto and the Algarve) although near term sales expectations have softened somewhat in Porto and the Algarve.

Nonetheless, expectations remain comfortably positive in each case. Alongside this, the series on new sales listings fell for the first time since December 2016, with the supply shortage appearing to intensify. This, combined with persistently strong demand, has led to the headline price indicator accelerating relative to previous months.

What’s more, price expectations over the next twelve months and five years remain firm, with the Algarve again expected to see strongest increases in the coming year. At the five year horizon, respondents envisage house price inflation accelerating to average 5% (per annum) in both Lisbon and Porto while expectations, on the same basis, point to a slightly stronger rate of growth in the Algarve.

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The National Confidence Index (an amalgamation of near term price and sales expectations) eased slightly from +47 in March to +43 in April. Even so, this month’s reading was the third strongest since the survey’s inception. In the lettings market, tenant demand continues to rise sharply, while new landlord instructions remain in decline. As a result, rent expectations strengthened, with the net balance increasing to +44%, from +38% last time

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