Portuguese house prices up 2.2% in the 1st quarter

Portuguese house prices up 2.2% in the 1st quarter

In the first three months of the year, house sales prices increased by 2.2% compared to the previous quarter, a figure that represents an acceleration compared to the 1.6% recorded in the fourth quarter of 2023. The data comes from the Residential Price Index, calculated by Confidencial Imobiliário.

"Notwithstanding the fact that this is a much lower quarterly variation than a year earlier," the databank notes that in the 1st quarter of 2023 (+4.3 per cent) the indicator now achieved signals of a reversal of the pattern of smoothing price rises seen over the last year, which, if confirmed, would contradict the prevailing market expectations.

Historical appreciation has slowed down again.

In any case, reflecting the accumulated behavior of prices over the last year, the year-on-year appreciation has slowed down again, reaching 9.6% in March 2024. This indicator is 7.6 percentage points below the year-on-year rate of change of 17.2% recorded in the first quarter of last year.

Interest rates are expected to start falling in the coming months, and this is improving buyers' confidence.

"In the last three months, the index has reversed its short-term trend, reaching a quarterly variation of +2.2%, after having this indicator at 1.6% in December. These figures confirm the latest results of the Portuguese Housing Market Survey, reflecting a more positive trend in demand and bringing sales expectations into positive territory. Interest rates are expected to start falling in the coming months, and this is improving buyer confidence, which ultimately puts additional pressure on prices," explains Ricardo Guimarães, director of Confidencial Imobiliário.

According to projections based on sales reported to the SIR-Residential Information System, in the first quarter of this year around 34,300 homes will have been sold in mainland Portugal. This volume surpasses by around 5% the average of 32,800 sales per quarter recorded in 2023, confirming the slow but consistent recovery in activity that has been felt since the second half of last year.

In terms of prices, residential sales in mainland Portugal amounted to an average value of 2,447 euros/sqm in the first quarter of this year, standing at 3,413 euros/sqm for new homes and 2,326 euros/sqm for used homes.

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