For 18 months, house prices have been rising almost continuously, supported by the increase in demand. That same demand should continue to help the increase in prices.
The real estate sector continues its recovery path. Data from the real estate consulting firm Confidencial Imobiliário shows that in the end of 2016, house prices in Portugal have increased; perspectives point to prices continuing to increase in 2017.
According to the Confidencial Imobiliário‘s Residencial Prices Index, in December, housing prices in Portugal had an homologous rise of 5.6%. Therefore, the upward trend that has been seen for almost 18 months continues, in spite of the increase from the last month of 2016 meaning there was a slight decrease in comparison to more recent data. Yet, the increase in prices in December was far from the 7.5% increase seen in the last quarter of 2016, in which the homologous increase was the highest of the last 15 years.
Ricardo Guimarães, managing partner in Confidencial Imobiliário, explains that “our price index is measured based on actual sales, translating the reality of the market”, adding that “the results show that the increase in prices continues to be strong, it is a well-established tendency”, since prices have been increasing almost continuously for the past 18 months as a result of the increase in demand.
“What we are seeing is an increasingly stronger alignment between the market’s effective performance and the perspective of those who operate in those markets, who estimate an average yearly appreciation on Portuguese housing prices of 4%”, adds Ricardo Guimarães. The respondents of the most recent monthly inquiry produced by Confidencial Imobiliário and RICS — the Portuguese Housing Market Survey, from January –, point to an increase in the price of houses for the next 12 months of around 4%, a percentage that had already been estimated for 2016. That same document shows that the dynamic demand continues to surpass the houses being supplied; therefore, the pressure to increase house prices should continue.