Property Report for Portugal 2023-2024

Summary of the Portuguese property market for 2023 - 2024

Engel and Volkers just released their property study for 2023 - 2024. Please see below a summary and click on the attached link for the PDF full report. 

Editorial
The Portuguese real estate market in 2023 faced significant challenges, including increased interest rates and tougher access to housing credit, resulting in a 17% drop in sales. Despite this, property prices rose, with new homes increasing by 8% and used homes by 9%. For 2024, high demand against limited supply is expected to continue, with potential impacts from new housing incentives and changes in tax benefits. Portugal remains attractive for international investors, particularly in cities like Lisbon, Porto, Cascais, and Braga.

Economic Situation in Portugal
In 2023, Portugal's economy grew by 2.3%, slowing from 6.8% in 2022. Inflation was at 5.5% in 2023 but is expected to decrease to 3.2% in early 2024 and further to 2.1% by 2025. Employment remains high despite a 7% unemployment rate, projected to drop to 6.7% by 2025. Private consumption and investment saw modest growth, with real estate transactions down by 18.7%. However, property prices continued to rise by 8.2%, driven by high demand from international buyers, particularly digital nomads.

Market Trends
The demand for housing in Portugal remains strong despite economic challenges. Major urban centers like Lisbon, Porto, and the Algarve continue to attract both domestic and international buyers. The rise of digital nomads and remote work has further fueled interest in these areas. New policies aimed at young buyers and changes in tax benefits for non-habitual residents could influence the market dynamics in 2024.

Tendencies and Property Value Changes: 2023 vs. 2024
In 2023, the Portuguese real estate market saw a significant reduction in the number of transactions due to economic factors, but property values continued to increase. This trend is expected to persist in 2024, with demand remaining high, particularly from international buyers. The average sale prices of both new and used homes rose, with new homes seeing an 8% increase and used homes a 9% increase. The market is anticipated to maintain this upward trajectory, driven by limited supply and sustained interest from foreign investors.

Engel & Volkers - Portugal Property Market 2023-2024