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A still volatile real estate market.

With regard to the Portuguese real estate market, the real estate sector has been one of the main drivers of the country's economy in recent years. The increase in demand for properties, both for sale and for rent, has been driven by the improvement in economic conditions in Portugal, as well as by the growing interest of foreign investors.


According to data from the National Institute of Statistics (INE), at the end of the first quarter of 2021, the average sale price of housing in Portugal reached 1,156 euros per square meter, which represents an increase of 5.1% compared to to the same period of the previous year. However, this price increase is more noticeable in the main Portuguese cities, such as Lisbon and Porto, where the average selling price per square meter exceeds 2,000 euros.


On the other hand, with regard to the rental market in Portugal, according to INE, the average rental price in Portugal increased by around 3.5% in 2020, compared to the previous year. This increase can be explained by the shortage of supply, as well as by the growing demand from students, remote workers and tourists, mainly in the main cities of the country.


With regard to the Portuguese real estate market, the trend towards rising prices in the housing market, especially in cities, has been accompanied by an increase in the construction of new real estate developments.


However, even with the increase in the construction of new properties, demand for housing has outstripped supply, especially in the metropolitan areas of Lisbon and Porto. According to data from the real estate consultancy CBRE, the vacancy rate for new housing in Lisbon is just 6%, while in some areas of the city, such as Avenida da Liberdade, the vacancy rate is just 1%.


In the rental market, the situation is similar. According to the Idealista online rental platform, the availability rate of properties for rent in Portugal is just 19%, while in the metropolitan areas of Lisbon and Porto the availability rate is even lower, standing at 11% and 14%, respectively.


However, in the European real estate market, the situation is quite heterogeneous, with some countries where the market is in full recovery, while in others the situation is still uncertain due to the effects of the COVID-19 pandemic.


According to PwC's "Real Estate Market Outlook 2021" report, most European countries are gradually recovering from the economic impacts of the pandemic, with the real estate market recovery being driven by growing demand for offices and retail, as well as recovery of tourism in some countries.


However, according to the same report, there are still uncertainties regarding the evolution of the real estate market in some European countries, namely in those that depend heavily on tourism, such as Spain and Italy.


The Portuguese real estate market has seen constant growth in recent years, but the shortage of supply has been a challenge for buyers and tenants. In the European real estate market, the recovery has been heterogeneous, with the countries of northern Europe presenting a stronger recovery than the countries most dependent on tourism


In short, the Portuguese real estate market has been experiencing constant growth in recent years, driven by improved economic conditions and increased interest from foreign investors. However, with regard to the European real estate market, the situation is quite heterogeneous, with some countries registering a stronger recovery than others.


 

Sources:


The analysis of the Portuguese real estate market was based on data from the National Institute of Statistics (INE) and the real estate consultancy CBRE.

Information on the increase in the construction of new real estate developments was taken from the Pordata website, which provides official statistics in Portugal.

Information on the availability rate of properties for rent in Portugal was obtained from the Idealista online leasing platform.

With regard to the European property market, the analysis was based on information released by the European Commission and by publications specializing in real estate, such as PropertyEU and Global Property Guide.

  • Instituto Nacional de Estatística (INE): https://www.ine.pt/

  • PwC: https://www.pwc.com/

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