Portuguese house prices have risen by almost 8 per cent in the first quarter of the year, as new homes help to drive the market recovery.
The latest official figures from the INE show that property values have risen 7.9 per cent in the first three months of 2017, compared to the same period in 2016, 0.3 per cent up on the annual growth recorded in Q4 2016. Prices jumped 9.2 per cent for existing dwellings, the same as in the last quarter of 2016, while new homes enjoyed significant growth of 4.2 per cent – the highest rate since the start of 2016.
On a quarter-to-quarter basis, the HPI rose 2.1 per cent, although existing homes were the drivers of improvement, with values more than doubling the rate of change recorded in the previous quarter (2.5 per cent, compared to the 1.2 per cent in the fourth quarter of 2016). In the case of new dwellings, prices increased 0.8 per cent, 0.2 percentage points slower than in the previous quarter.
The figures arrive as the RICS/Ci latest housing survey is released, highlighting the continuing healthy growth of the country’s real estate market. Prices continued to increase nationally in May, according to agents, although the rate of growth eased slightly in comparison to the record monthly pace reported in April. Alongside this, demand growth remains strong, as a net balance of 36 per cent more respondents noted an increase in new buyer enquiries (in line with consistently solid readings over the past five months).
Supply is now the headwind on the market recovery horizon, as new sales listings continued to decline, with respondents in the Algarve reporting the most significant drop in new listings coming onto the market since 2011. The decline in new listings continues to support price growth.
Looking ahead over the next 12 months, contributors envisage prices increasing by around 4 per cent nationally. Over the next 5 years, house price inflation is expected to average around 5 per cent per annum.
