Last year, the average price of an old house reached the same value as a new house in 2019. This is one of the main conclusions of CBRE's latest study, "Unlocking the Potential of Portugal's Residential Market".
This accelerated appreciation of old housing reflects the growing shortage of new supply and the mismatch between what the market offers and what families really need.
"The current context of a shortage of housing supply in urban areas, combined with demographic pressure and tax incentives that stimulate demand, requires an urgent and sustained response in terms of new housing construction. Portugal doesn't just need more houses, it needs entire neighbourhoods, large-scale developments designed for the real needs of today's families - smaller, more diverse, with less purchasing power - and in locations with accessibility and services," argues Igor Borrego, Head of Capital Markets at CBRE Portugal.
Currently, 77% of residents in Portugal own the property they live in. Only in Poland and Norway is this trend more pronounced, but in countries like Spain, Italy or Greece, and especially in the Nordic countries, buying is no longer as prevalent, as there is a greater culture of renting.
Despite the challenging scenario, the consultancy identifies several urban areas where there are concrete conditions for immediate construction, which makes it possible to speed up processes and respond quickly to the housing shortage. These areas include, among others, Alta de Lisboa, Taguspark (Oeiras), Montijo, Alcochete and Vila Franca de Xira, in the Lisbon Metropolitan Area, as well as emerging areas in Greater Porto, such as Águas Santas (Maia), Prelada and the eastern part of the city.
50% of Portugal's housing stock is over 50 years old
These locations represent a concrete opportunity to develop new housing, with typologies adjusted to the current profile of households - more than a third of homes are inhabited by just one or two people - and with prices that allow the market to absorb quickly. Around 50% of the housing stock in Portugal is over 50 years old, which reflects an urban design that is out of step with the current demographic reality.
"Lisbon, Porto and the Algarve have seen property prices more than double in the last 10 years, but there has recently been a more marked increase on the outskirts of the major urban centres," adds Igor Borrego.
With demand at historic highs, a shortage of labour in the sector and construction costs putting pressure on supply, the residential sector is already considered the most attractive asset class to invest in by 2025 in Europe, and Portugal has entered the top destinations favoured by foreign investors seeking profitability through real estate.
