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What has happened? Home sales in Portugal fell sharply in the first six months of the year as rising interest rates and the government's decision to end incentives for some foreign buyers weighed on the housing market according to real estate services provider Jones Lang LaSalle (JLL).
Details. Home sales fell 22% to 68,000 units in the first half of the year compared with the same period a year earlier, JLL said. In 2022, approximately 168,000 units were sold in Portugal, which was the highest sales volume on record.
However, according to JLL, property prices are not expected to fall anytime soon as housing demand continues to outstrip supply.
Quote. “There continues to be a structural shortage of supply,” Joana Fonseca, head of research at JLL, said at a presentation in Lisbon on Thursday. “The pace of new homes arriving on the market continues to be well below the volume of demand.”
Context. Earlier this year, Portuguese Prime Minister Antonio Costa announced he was ending the Golden Visa program to curb speculation in the property market and help end the housing crisis in cities such as Lisbon, where property prices have more than tripled since 2015.
His socialist government will also end the so-called non-habitual resident regime next year, which offers lower income tax rates for a 10-year period to qualifying people who move to the country.
Both programs helped revive Portugal's moribund property market after 2011, when the country struggled to emerge from a deep recession. While these programs continue to help attract foreign property buyers, they now account for only a small proportion of property transactions in Portugal.
Source: BNN Bloomberg
Photo by Diego García on Unsplash
