Real estate: the turning point of growth

Real estate sales through the Century 21 network declined 4.8% in the final quarter of the year, while prices fell 5.1%. The effect of rising interest rates is already being felt in the market.

The last quarter of 2022 showed signs of inverting the growth cycle of the Portuguese real estate market. In these months, traditionally the best of the year for the sector, the Century 21 Portugal chain recorded a 4.8% decrease in the number of sales transactions compared to the previous quarter, while the average value of properties sold fell by 5.1%. Leasing transactions decreased by 12%.

In the context of rising interest rates on home purchases, as well as the credit restrictions imposed by the Portuguese Bank's macroprudential measures, the Portuguese can be expected to hold back on their home buying intentions this year. These factors “will constrain the purchasing power of the Portuguese and limit the value of properties they can purchase,” Century 21 said in a statement. Immobilization will probably cause more pressure on the outskirts of the country's main cities due to the decentralization of demand, which could lead to higher prices.

The rising cost of living and the difficulty many families face in obtaining a mortgage loan should lead to increased demand for rental housing. In this market segment and due to potential pressures Century allows for the possibility of rental price increases.

Foreigners accounted for 18% of the total number of real estate transactions. Century 21 earned 94.7 million euros last year, 24% more than the previous year.

Foreigners accounted for 18% of the total number of real estate transactions, while interest in different regions of the country is growing among them. The average value of real estate transactions in this segment amounted to 340 thousand euros, well above the average check of Portuguese families of 188 thousand euros. Citizens of the United States, France, the United Kingdom, Brazil and Switzerland are the main investors.

Last year, Century 21 Portugal expanded its network by 29 franchisees and now has 212 active units with about 4,500 employees, including loan officers and real estate agents.