Updated: September 18, 2024
While Portugal has experienced imbalances between supply and demand in the property market recently, with demand fast outpacing demand, in Lisbon and Porto, the supply of houses to purchase has increased by 11 percent between the second and third quarter of 2024, when compared with the same period in 2023. Alongside this, many other key district capitals in the country have also seen increases in the supply of houses for sale.
Housing Supply Increases in Lisbon and Porto
House sales in Portugal have been falling recently, despite interest rates on housing loans having fallen for several months. This has impacted the supply-demand relationship, with the lower demand having an impact on pricing developments, which have been rising at a slower rate.
Alongside this, these developments have led to an increase in the housing supply. At the beginning of 2024, the supply of housing for sale increased in 13 of the 20 district capitals between the second quarter, when compared with the same period of 2023.
The district capitals where the stock of housing available increased were:
- Vila Real: 43 percent
- Leiria: 33 percent
- Viseu: 30 percent
- Beja: 29 percent
- Castelo Branco: 17 percent
- Ponta Delgada: 16 percent
- Setúbal: 12 percent
- Lisbon: 11 percent
- Porto: 11 percent
- Bragança: 11 percent
- Braga: 7 percent
- Santarém: 6 percent
- Guarda: 6 percent
As you can see, this includes the capital city, with Lisbon real estate having long been a favorite with foreign real estate buyers, and Porto, the northern gem of Portugal that has become prime investment location in recent years. The luxury real estate market in Porto, in particular, is has been identified as one of the top ten emerging luxury markets in the world, along with Algarve real estate, according to the Knight Frank’s The Wealth Report 2023.
It is worth bearing in mind that the recent increase in property supply in not universal across the country. Many district capitals have experienced a rise in the supply of properties available for purchase, but there are some where the supply has been decreasing. This includes Portalegre (-25 percent), Évora (-16 percent), Viana do Castelo (-14 percent), Aveiro (-13 percent), Coimbra (-4 percent), and Faro (-2 percent). In Funchal, the capital of Madeira, there was no change in the supply of houses available.
What does this mean for foreign property investments?
The Portuguese real estate market is constantly in a state of motion but has been consistent in moving from strength to strength in recent years. With more properties available on the market, Portugal remains a hotspot location for property investors. The fact that supply is also increasing in key cities bolsters the real estate market and relieves some pressure that has been causing a housing crisis in the country.
The range of property types in Portugal and the potential for a high return on property investments are two key aspects as to why foreign investment in Portugal has been on a roll in recent years. With modern apartments, countryside villas, and beachside houses all available, in addition to more luxury properties, such as vineyards, luxury farms, and even palaces available, the real estate market is diverse – and dynamic.
Looking to find out more about Portugal’s real estate market? Check out our complete guide
