House prices up 5.46% during the year to Q3 2021
Portugal’s housing market is still growing, albeit at slower pace, amidst improving economic conditions. Property prices in Portugal rose by 5.46% y-o-y in Q3 2021, almost halved the previous year’s annual growth of 10.6%. On a quarterly basis, house prices increased 2.85% in Q3 2021.
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. House prices have been continuously rising since.
Construction activity rising again.
After slowing sharply last year due to pandemic-related restrictions, residential construction activity is rising again. In the first three quarters of 2021, the number of licensed dwelling permits in Portugal rose by 15.3% to 21,230 units from a year earlier, following a 2.6% growth in 2020, according to figures from the Instituto Nacional de Estatistica (INE). Residential construction surged by 8.4% in 2019 and 43.5% in 2018.
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 expanded by 4.2% in Q3 2021 from a year earlier, following a record year-on-year growth of 16.1% in Q2, according to INE. GDP declined for five straight quarters from Q1 2020 to Q1 2021 due to the Covid-19 pandemic. For the full year of 2020, the economy contracted by 8.4% - the worst contraction since 1936.
The economy is projected to expand by 4.5% this year and by another 5.3% in 2022, based on the European Commission’s forecast, amidst a rebound in exports and a recovery in private consumption after coronavirus-related restrictions were eased.