Real estate market in Portugal: fewer transactions, higher prices

Currently, the real estate market in Portugal is going through a phase of adjustment, marked by a reduction in the volume of transactions and a maintenance of pressure on prices. Thus, it becomes essential to adopt a more analytical and strategic approach to investing. 

Recent data from the sector point to a drop of more than 10% in the volume of transactions in some residential segments, reflecting the cumulative impact of high interest rates, tighter financing conditions and greater demand from buyers.

Even so, house prices continue to show resilience, with positive annual changes in several areas of the country, albeit at a more moderate pace compared to previous years. In certain urban and peri-urban locations, the valuation remains supported by the structural scarcity of supply compared to demand.

This misalignment between the evolution of transactions and the trajectory of prices highlights a market in a rebalancing phase, where the volume of activity decreases, but the value of assets remains high.

In this context, some determining factors stand out:

• Benchmark interest rates remain at high levels compared to the average of the last decade, constraining the net lending of households
• The available housing stock remains below structural demand, especially in urban areas such as Lisbon and Porto
• The average time to absorb real estate increased, reflecting greater selectivity on the part of buyers
• Institutional investment remains active in specific segments, such as leasing and urban rehabilitation

Despite the reduction in the number of transactions, the Portuguese real estate market maintains solid fundamentals, supported by demographic factors, supply shortages and continued interest from national and international investors.

In this scenario, careful analysis of market data and strategic reading of trends become essential for decision making.

At Mulberry Real Estate, we continuously monitor the evolution of industry indicators, supporting investors and clients in identifying sustained opportunities in a changing market.