The decline in housing prices in Portugal is slowing down.

Data presented by the National Institute of Statistics (INE) shows that while housing prices increased by 8.7% in the first quarter of the year, this figure still represents a slowdown compared to the previous quarter at the end of 2022, when a growth of 11.3% was recorded.

According to Emma Pengelly, in News, Portugal, Business · June 22, 2023, 19:05 · 4 comments.

The 8.7% growth recorded in the first quarter of this year represents the least significant annual price increase since the second quarter of 2021. Additionally, the Lisbon region has faced the lowest sales levels since 2016, excluding the decline recorded during the pandemic. According to INE data, the housing price index increased by 2.6 percentage points lower than in the previous quarter. Despite this slowdown, it is worth noting that the overall change in housing prices (1.3% compared to the fourth quarter of 2022) has increased compared to the 1.1% recorded at the end of last year.

Fewer homes were sold compared to 2022. In the first three months of the year, only 34,493 homes were sold, which is 20.8% less than in the same period of 2022, representing a decrease of 10.5%. The total sales amount for real estate was 6.9 billion euros, which is 15.2% lower compared to the first quarter of 2022. Almost 85% of the homes were purchased by families, amounting to 5.8 billion euros. INE reports that this figure is the lowest since the second quarter of 2021.

The share of national buyers has decreased, with 7.2% of purchases made by foreign buyers with tax residency outside Portugal.

Regional analysis shows that the highest number of homes was sold in the Northern region of Portugal at the beginning of the year (9,924 homes). "In the Lisbon metropolitan area, 9,761 transactions were recorded, which, excluding the second quarter of 2020 due to the impact of the COVID-19 pandemic, is the lowest number of sales in this region since the fourth quarter of 2016," notes INE.

Housing prices remain high despite a decrease in transactions. Despite the reduction in the number of transactions, real estate prices in the capital remain high. "From January to March 2023, the Lisbon metropolitan area accounted for 40.6% of the total value of real estate transactions, followed by the North with 23.5%," while the value of transactions is the lowest in the last two years. However, INE also showed that "in the first quarter of 2023, all regions recorded a decrease in the annual number and value of housing transactions."

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