The year 2022 ended on a high, with a record 167,900 homes sold, mostly to Portuguese buyers but with a significant number of overseas buyers. There were already signs, however, of a slowdown in the last months of the year.
So, after record sales and increases in the price of property toward the end of 2022, 2023 was one of adjustment for the Portuguese residential real estate market. But what does 2024 hold?
1. Fewer sales
The signs of a slowdown were confirmed in 2023. Until September, home sales in the country dropped by around 20%, with the largest decline recorded in the Algarve and Greater Lisbon, according to the National Institute of Statistics (INE).
Last year also saw the number of available properties in the Algarve rise by almost 20%, countering a 15-year low in the number of properties for sale across Portugal the previous year. So, what does that mean for property prices?
2. Price correction
An effect of high inflation, rising interest rates on mortgages, economic uncertainty and legislative changes, the drop in the number of transactions and the increased supply in 2023 resulted in slower property price growth. According to experts, there will be a continued correction in house prices in 2024.
3. Investor uncertainty
Overseas investors made their mark in 2022 and 2023. But the Portuguese government's efforts to solve the housing crisis have led to the scrapping of programmes that brought in significant foreign investment, such as the Golden Visa and the Non-habitual Resident (NHR) regime.
That, along with recent crackdowns on short-term rentals, has led to some uncertainty among international investors. However, given its longstanding appeal and even its improved Moody's rating, Portugal remains a sound investment and continues to be sought after by overseas visitors and buyers.
For property investment advice in Portugal, an expert team with decades of local knowledge is your biggest ally. Contact us at Algarve Home Sales.