House prices up 7.83% y-o-y during 2019

Portugal’s housing prices continue to rise, fuelled by surging demand as well as improved economic conditions. Property prices in Portugal rose by 7.82% during 2019, up from y-o-y increases of 5.39% in 2018, 3.03% in 2017, 3.85% in 2016, and 4.06% in 2015. In fact, it was the highest growth in more than a decade. House prices increased 1.94% q-o-q in Q4 2019.

All regions of Portugal have experienced significant house price falls during the last decade. And despite some recovery in 2009, house prices started to fall again in the last quarter of 2010. Prices only began to recover in Q4 2014, after 13 consecutive quarters of y-o-y house price declines.

Demand steady, supply surging. In the first three quarters of 2019, the total number of dwelling sales in Portugal was almost unchanged from a year earlier, at 132,246 units, according to the Instituto Nacional de Estatistica. Yet, the value of transactions increased 4.3% y-o-y to €18.65 billion (US$20.23 billion) over the same period. 

During 2019, the number of licensed dwelling permits in Portugal soared by more than 17% to 23,737 units from a year earlier, after rising by about 40% in 2018, based on INE figures.

Portugal is expected to remain one of the hottest property markets in the region, with financial database Trading Economics predicting house price increases of about 5% this year.

Rents, rental yields: yields are good in Lisbon, at around 5.45%  

Lisbon apartment costs around €3,830 per sq. m.

Portugal: typical city centre apartment buying price, monthly rent (120 sq. m)
  Buying price Rate per month Yield
Lisbon € 300,000 € 1,578 5.45%

Recent news: The Portuguese economy grew by a modest 2% last year – exceeds the estimates by various international organizations like IMF and OECD, but remains short of the prior year’s 2.4% growth, according to the INE. The economy is expected to expand by 1.7% both this year and in 2021, based on projections released by the European Commission.