Strong demand and a lack of supply continues to push up prices in Portugal where the housing market recovery is well underway, according to the latest property market survey.
Although the headline pace of growth remained constant in March 2017 when compared with February, the survey from the Royal Institution of Chartered Surveyors (RICS) and Confidencial Imobiliário points out that price expectations over the next three months have risen continuously since July 2016.
In the lettings market, the shortage of landlord instructions remains a dominant factor pushing rents higher, the report also points out. But the report says that a shortage of supply does appear to be dampening demand expectations, with a net balance of -9% of respondents anticipating demand will soften going forward.
Taking a longer term view, it reveals that survey respondents believe the strongest price increases over the next 12 months will come in the Algarve. Further ahead, contributors foresee the pace of growth converging across Lisbon and the Algarve over the next five years, while expectations remain a little weaker in Porto.
The report says there is a considerable momentum behind the sales market with promised sales rising at the strongest pace on record and this is matched by a pick-up in both demand and sales expectations.
Respondents reported a rise in transactions across the sales market over the month along with an increase in new buyer enquiries. Overall, the March results are consistent with a more buoyant sales market backdrop and activity is expected to gather momentum at a faster pace than previously envisaged.
This increase in overall activity is representative across all three regions of Lisbon, Porto and the Algarve which are covered by the index. At the same time, sales expectations over the next three months strengthened at the national level for first time in three months.
