According to the latest results from the Portuguese Housing Market Survey by Confidencial Imobiliário and RICS, despite a lack of supply in the market continuing to exert some pressure on prices , housing prices in general have begun to show signs of stabilisation.
Simon Rubinsohn, Chief Economist of RICS, confirmed that “although the growth of the Portuguese economy has gained new momentum in the first months of 2019, the housing market seems to be losing momentum.”
He added: “Since consumer confidence levels remain relatively strong, this loss of momentum suggests the influence of other factors, such as the financial capacity for access to housing”.
According to Ricardo Guimarães, director of Confidencial Imobiliário, “almost all respondents’ comments confirm that investors are more cautious, are looking for the best opportunities and are aware of the risks of overvaluation.
“Sellers are also reviewing their expectations, and some are already lowering the asking prices for their properties. Some operators consider that the volume of new homes under construction will also put some pressure on prices, especially in the resale market. At the same time, despite the decline in new lending, traders feel that restrictions on access to credit are limiting potential demand.”
Regarding the sales prospects for the next three months, the respondents of the survey presented only marginally positive expectations for the three regions of the Algarve, Lisbon and Porto.
On the supply side, the new sales instructions fell again in April, with a net balance of -33 percent of respondents reporting a decline (this is the lowest reading since December last year). In regional terms, respondents reported a stabilisation of prices in Lisbon and the Algarve, although in Porto they continued to show solid growth.
In the rental market, projections for rental price growth are now in neutral territory, suggesting that the recent period of price rises is now losing pace.