In 2016, the real estate market returned to 2010 levels. The sale of new dwellings had an 18.5% increase last year. The number of licensed buildings also increased.
Construction is one of the Portuguese economy sectors which has not yet recovered in comparison to where it stood before the Portuguese 2010 economic crisis. However, the sector continues showing signs of an acceleration in the recovery. Data from Statistics Portugal (INE) concerning 2016 show an increase in the amount of dwellings and licensed buildings’ transactions, changing the downward tendency registered in the last couple of years.
In 2016, housing transactions surpassed the 14.8 billion euros. Thanks to an 18.5% growth in 2016 — as well as a 27.4% rise in 2015 –, the number of dwellings transacted reached 127,106, a number close to the 129.950 dwellings purchased and sold in 2010. Out of the total, 105,502 concern existing dwellings and 21,604 concern new dwellings.
However, these numbers show that, unlike what happened in 2010, the number of sales of new dwellings is significantly smaller in 2016. The recovery has been taking place because of existing dwellings: “Sales of new dwellings accounted for EUR 3.4 billion, decreasing by 3.9% (+7.2% in 2015) while existing dwellings increased by 27.6% (+43.1% in 2015), totaling EUR 11.4 billion“, disclosed INE this Monday.
Licensed buildings grow 10.9%
Last year (2016), the trend on many housing statistics turned around. It was the case of the number of licensed buildings, which grew 10.9% last year and inverted the negative variations’ trend it had been seen since at least 2011: “In 2016 the number of building permits in Portugal increased by 10.9% (-3.7% in 2015), with 16 738 buildings being licensed, changing the downward trend of recent years”, INE discloses.
Prices increase for the third year in a row
Housing prices have been increasing since 2014, especially in Lisbon and Oporto. In 2014, housing prices increased more than 2%. In 2015, there was a 3.1% increase and last year, it increased another 7.1%, a trend which is followed by an average increase in banking valuation of houses which increased 3.8% last year.
“The house price index increased by 7.1% in 2016 (+4 p.p. vis-à-vis 2015), corresponding to the third consecutive year of growths in the prices level, more intense in the already existing dwellings (+8.7%) than in the new dwellings (+3.3%)”, INE discloses. The Portuguese statistics entity further stated that the costs of constructing new dwellings turned around: in 2016, the growth rhythm stopped decreasing, registering an yearly average variation rate of 0.6%.