Portugal Property Market Remains Stable in Q1 2024

JLL's Market Pulse study reveals that the Portuguese real estate market showed consistent performance compared to the previous year.

In the first quarter of 2024, the Portuguese real estate market showed steady performance across most sectors compared to the same period in 2023, according to the latest quarterly Market Pulse study by JLL. Commercial investment and transactional segments in housing, hotels, retail, and logistics all maintained similar levels of activity, with the exception of the office sector, which experienced significant growth. Despite a less expansive demand, scarcity of supply in certain sectors continued to drive price and income growth.

Commercial real estate saw €260 million in investments in the first quarter, showing a slight decrease of 5 percent from the previous year but remaining consistent with the average of the last three years. The hotel sector saw improvements in the number of guests, overnight stays, and occupancy levels in Lisbon and Porto, indicating a positive trend compared to 2023. In the housing sector, demand remained slightly lower than the previous year, but transactions stabilized, particularly in sales for differentiated projects and among international buyers.

Retail sales showed a marginal variation of around 0.5 percent, highlighting the stability of different retail formats. The office segment stood out with a notable recovery, doubling take-up in Lisbon and Porto compared to the previous year. Industrial and logistics real estate experienced a drop in occupancy due to limited supply, leading to rising rents.

Average daily rates in hotels reached maximum levels in Lisbon and Porto, impacting RevPAR positively. Despite a decrease in sales in the housing sector last year, prices continued to rise nationally, albeit at a slower pace. Logistics saw an increase in prime rents, while retail rents stabilized across different formats, except for street commerce in Porto, which saw an upward trend.

Prime office rents remained stable in Lisbon and Porto, reflecting the overall resilience of the real estate market in Portugal. The data suggests a mixed but generally positive outlook for the sector in the coming months.

In conclusion, the Portuguese real estate market in the first quarter of 2024 displayed resilience and stability across various sectors, with some areas showing notable growth despite challenges. The trends observed indicate a promising outlook for the market, with continued demand and price growth in key segments.