Portuguese real estate price growth continues apace according to the latest index from Confidencial Imobiliário and the Royal Institution of Chartered Surveyors (RICS).
Prices in Portuguese real estate grew nationally by 12.8 per cent over 2017, though the capital of Lisbon raced ahead with growth of 21.1 per cent in its historical centre over the same period and prices have actually doubled over the last four years.
The index expects Portuguese real estate price growth of around 4.5 per cent nationally during 2018, rising to around 5.5 per cent per annum for the next five years.
Overseas property investors may wish to note that on a regional basis the index expects Porto to be the area to watch for strong price growth over the next 12 months, whilst the Algarve may be the best bet over a five-year period.
A lack of new property instructions to sell is helping to boost the price growth. New instructions to sell continue to decline and have been negative for almost a year now.
The national confidence indicator that measure near term price and sales expectations may have slipped from a record high of +47 in January to +37 now, but this still indicates strong momentum in the market.
Rents also continue to rise due to a lack of available rental property, meaning that overseas property investors can look forward to strong rental demand when purchasing.
Simon Rubinsohn, RICS chief economist confirmed that the fundamentals of the market are strong, saying: ‘Indeed, employment and household incomes are rising, consumer confidence remains elevated, and credit conditions have eased further over recent months. Given this, the outlook for housing market activity appears solid as we move through 2018.
Director of Ci, Ricardo Guimarães agreed, saying: ‘Top markets see new records every quarter and the most expensive prices previously have become just averages in the present. These quick changes have raised concerns for some respondents about developers and buyers operating in secondary locations, where prices might become unaffordable relative to local rationales.’