The residential real estate market in Portugal is seeing an ongoing steady recovery in prices, supported by rising demand and increasingly strong growth in sales activity, according to the latest index.
While the lettings market has seen rents stable for a fourth month in succession following years of persistent decline, the index survey from the Royal Institution of Chartered Surveyors (RICS) and Confidencial Imobiliário shows.
The data also shows that new buyer interest continued to rise at a firm pace across all regional markets, with growth particularly pronounced in Porto during June. But the market is still open to the weakness of the euro zone, particularly Greece.
At the same time, newly agreed sales increased at the sharpest monthly pace since the survey was launched back in 2010, and have now risen continuously for around a year and a half.
Going forward, sales expectations are pointing to further robust growth in the near term, even if the net balance eased slightly from the record high set in May. Given the sustained improvement in both enquiries and sales, prices continued to recover for a sixth month in succession, the index report explains.
It also points out that the pace of house price growth accelerated a notch, driven primarily by the strong gains posted in Lisbon and looking ahead, near term price expectations continue to point to a stronger pick-up on the horizon.
Over the next 12 months, respondents are now anticipating prices will rise by 2.7% at the national level. Again, the strongest recovery is anticipated to come in Lisbon and the Algarve at around 3%, while projections are for 2% growth in Porto.
The national confidence indicator, an amalgamation of near term price and sales expectations, now stands at +36 equalling the third highest reading on record, despite easing compared to May’s exceptionally strong result.
In the lettings market, solid growth in demand continues to be met with a decline in the number of new listings by landlords. As a result, rents remained more or less unchanged for a fourth consecutive month, while expectations suggest a further period of stability lies ahead.
‘It is important to see the Portuguese market’s resilience in the face of the uncertainty caused by the Greek crisis,’ said Ricardo Guimarães, Director of Ci.
‘Risks were highlighted by the agents but, nevertheless, activity indicators remained clearly positive, regarding both sales and prices. This was a critical test for the market, reinforcing its potential,’ he added.
RICS chief economist, Simon Rubinsohn, believes that the recovery in sales market activity appears to be gathering momentum, driven by improving economic fundamentals and rising confidence.
‘However, significant risks remain within the euro area which could damage sentiment if a resolution is not found,’ he warned.
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Source: Property News Spain