Despite the rising costs of buying a home in Portugal, there are no signs that the real estate market is slowing down. Data indicates that in some areas like the Algarve and Lisbon, some foreign buyers are willing to pay twice as much as a Portuguese resident for a property in Portugal.
High building costs push up property prices
Events in the Ukraine have impacted the construction industry across the globe causing material and building costs to rise sharply. In Portugal, this has certainly slowed down building projects and created a scarcity of new developments. The lack of supply has triggered a spike in prices with an increase in demand from buyers and investors, and led to already-built homes going up in value.
Portugal’s Property Hotspots
Not only the Algarve, but areas in and around Porto and Lisbon se areas are benefiting from a combination of international investment, urban regeneration, and tax incentives targeted at affluent expatriates. Across these hotspots, the balance of supply and demand is particularly out of kilter. Between 2018 and 2022, for every new house built, ten were sold, demonstrating the reduced level of housing stock.
Algarve will be a Property Hotspot in 2024
Since 2020, property values across the Algarve have enjoyed spectacular growth achieving over 28%. Property experts anticipate that prices in this popular area could go up a further 19% by 2025. In particular, Qunita do Lago looks like it will continue to be a perennial property favourite, appealing to homebuyers and investors looking for a luxury home with great golf courses, endless beaches and an amazing lifestyle.
Goodbye to the Golden Visa
Most expert commentary around the recent amendments to Portugal’s Golden Visa Programme, which come under the ‘More Housing Bill’, state it is unlikely to have a negative effect on the country’s real estate market. The Property Market Index has commented that, ‘home prices will continue to rise irrespective of these changes.’ This is a clear indication of the robust and healthy state of Portugal’s property market and the ongoing interest from overseas investors and buyers.
What lies ahead for Portugal’s real estate market in 2024
During 2023, property prices across Portugal rose on average by 6.5% and experts are forecasting that house prices will continue to increase in 2024. The Property Market Index is predicting a growth figure of around 8.7% for the year ahead.
Portugal remains an attractive reliable choice for investors and homebuyers. The Algarve and Lisbon show indicators of robust growth. Property values are set to rise with the ongoing reduction of new developments across the country. Experts forecast that the popularity of Portugal as a global destination offering potential for solid investment return is set to continue in 2024.