“Housing was the star sector of real estate in 2021, surpassing all previous levels of activity”, says JLL in a report by ECO. Last year, the JLL estimates that 190,000 homes were sold, 18 percent more than in 2020 and 12 percent more than in 2019 (in what had been a record year for the national residential market).
Of the 190,000 homes sold, 89 percent were sold to domestic buyers and around 11 percent to foreign buyers. “The strong market fundamentals should continue in 2022, with a new year of high activity expected”, says the consultant, noting that changes to the golden visa regime should not have negative consequences for the market, “since Portugal is already a recognised residential destination abroad”.
Despite this good performance, the problem of a shortage in supply persists. Joana Fonseca, responsible for Research at JLL, states that the housing stock “has increased by only 1.9 percent in the last decade, which corresponds to around 108,500 dwellings, that is, less than what was sold this year”.
Pedro Lancastre, CEO of JLL Portugal, also warns of the obstacles that remain in the residential market, namely the “slowness and bureaucracy of the licensing processes”. The official notes that the average number of residential units licensed in Portugal in the last decade was 70 percent below the previous decade (2001-2011).
Another constraint is the sharp rise in construction costs, which impacts business plans and end-user pricing. The latest data showed a 7.4 percent increase in construction costs in the last year alone. The consultant warns of the urgency of “managing these constraints so that the creation of supply can be swift and respond to the country's needs”.