Portugal Sees 12-Year Record Increase In Property Prices
According to the Portuguese Institute of Statistics, house prices in the 2nd quarter of 2022 increased by 13.2% compared to the same period last year. This is the biggest increase since the institute began collecting market data in 2010. The rise in prices compared to the 1st quarter amounted to 3.1%.
Developers, including Vanguard Properties, which has invested about 1 billion euros in projects in Portugal, believe that the reason for the increase in property prices is the shortage of housing, which is caused by long delays in issuing new building permits, especially in Lisbon.
The lack of supply is exacerbated by growing demand from foreigners. They are attracted by the pleasant climate and lower cost of living than in other countries. Buyers from abroad are willing to pay for an apartment or house in Lisbon more than twice as much as local residents, according to a report from the Statistical Institute in April this year.
Joana Almeida, Lisbon Councilor, speaking at a recent real estate conference, acknowledged delays in issuing permits for new construction and assured that the city is actively working to speed up the licensing process in order to increase the supply of housing on the market.
The Portuguese government has already taken steps to manage demand. Thus, residential real estate in Lisbon and the northern city of Porto has been excluded from the Golden Visa program since January 1, 2022. In addition, the authorities have introduced a limit on rent increases next year (2%), thus trying to contain the increase in the cost of living in the country.