Portugal Real Estate Market: Rental Availability Up, Prices Still Rising

Discover the latest trends in the Portugal real estate market, where increased property availability has not led to reduced rental prices. Stay informed on the current market conditions.

In recent months, the real estate market in Portugal has seen a significant increase in the availability of rental properties, with Imovirtual, one of the country's leading digital real estate portals, currently listing around 15 thousand properties for rent. This marks a 25% increase compared to the previous year. Despite this surge in supply, rental prices have continued to rise, reaching an average of 1,300 euros in April, an 8% increase from the same period last year.

According to a report by Dinheiro Vivo, the lack of impact on prices can be attributed to high demand and low supply in the market. The real estate sector is facing a persistent challenge of a shortage of properties, with the average price of houses for sale advertised on Imovirtual reaching 325 thousand euros in April, a 10% increase from the previous year.

The decrease in the supply of homes for sale, from over 240 thousand in the previous year to around 232 thousand in 2024, reflects the current macroeconomic context where the cost of new construction remains high and there are challenges such as lengthy licensing processes and vacant properties on the market. To address this issue, it is crucial to implement policies that encourage the construction of new housing, such as reducing VAT to 6% on new construction and offering significant tax reductions for first-time homebuyers.

Despite the current challenges, there is hope for a better balance between supply and demand in the real estate market in Portugal in the coming months. Government incentives and improved economic conditions, including more favorable interest rates, are expected to contribute to this positive development.

The real estate market in Portugal is facing a shortage of properties, leading to rising prices despite an increase in availability. Addressing this issue will require a concerted effort to encourage the construction of new housing and provide incentives for homebuyers.