The Portuguese market has slowed down, but the Prices Continue to Rise
The most recent figures on the real estate market in Portugal confirm a trend that was already taking shape: the pace of sales has slowed down, with a drop of around 9.4% in the number of transactions, but prices continue to rise consistently.
At first glance, it may seem like a sign of reversal or deeper cooling, but in reality, we are only witnessing a stabilisation at a high level, without the structural problem having been solved.
The market is not falling; it is adjusting. After years of strong growth, driven by domestic and international demand, it was natural that the volume of transactions would find a limit. However, the fact that prices continue to rise by more than 20% year-on-year shows that the pressure remains intact. And that pressure does not come from pure speculation, as is often tried to simplify, but from a clear imbalance between supply and demand.
Portugal continues to build less than it needs. The approximately 26 thousand homes completed last year represent only a fraction of what was produced two decades ago. Licensing remains slow, construction costs are high and access to financing for real estate development remains limited. All this contributes to the new supply not reaching the market with the necessary scale.
At the same time, demand remains resilient. Whether for demographic reasons, international mobility or the attractiveness of the country, Portugal remains on the radar of investors and buyers. Even in the context of international instability and possible interest rate hikes, the market remains active, albeit with less dynamism.
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