Demand for homes with more space, inside and out, is impacting the evolution of residential property costs, according to an analysis by idealista.
House prices, although less than in previous years, continued to increase in 2020 in Portugal and in general, this upward trend is expected to continue in 2021. What explains this phenomenon in a context of economic crisis generated by the COVID-19 pandemic? The pandemic and subsequent lockdowns brought about new needs in terms of housing, generating an increase in the demand for properties with more space, both inside and outside. Space is the precise factor that is having the most impact on the evolution of residential property prices in Portugal in 2021 according to a recent idealista analysis.
Penthouses in Portugal have been the "queens" of this period in which new housing priorities have been identified, becoming 9.3% more expensive in one year. The price per square metre of penthouses rose from 3,121 euros in December 2019 to 3,411 euros at the end of 2020, highlighting the interest in the type of facilities that these flats usually offer: good division of spaces allowing better family balance with working from home, as well as terraces and unobstructed views.
But that's not all. By analysing the data provided by idealista/data (based on property listings for residential properties for sale published on the portal in 2020), it can be seen that the prices of flats in general with terraces, as well as villas and estates have also increased. Once again, these typologies are distinguished by having more outdoor space and gardens, things which have proven to be fundamental during the coronavirus lockdown in Portugal.
Flats with terrace became 7.3% more expensive in a year, going from 2,549 to 2,734 euros/m2. When it comes to villas, the same scenario is observed, with prices registering a 7% annual change, with the price/ m2 rising from 1,457 euros/m2 in December 2019 to 1,559 euros/m2 in December 2020. Estates or "quintas" also became 6.2% more expensive, with the m2 price rising from 1,339 to 1,422 euros/m2.
"Since the start of the pandemic, we have noticed that prices in the residential sales market have not fallen, on the contrary, in general they have risen slightly. The demand for properties with more space has increased considerably, and prices have followed this upward trend, especially when we look at properties with specific features, such as terraces and gardens. Analysing demand is essential to understanding variations in supply", points out Inês Campaniço from idealista/data in Portugal.
|Property typology||Dec-19 (price/m2)||Dec-20 (price/m2)||Annual variation (%)|
|Apartments with terrace / balcony||2,549||2,734||7.3%|
|Estates or "quintas"||1,339||1,422||6.2%|
|Apartments with garden but no pool||2,125||2,245||5.6%|
|Studio apartments (T0)||3,680||3,860||4.9%|
|3-bedroom apartments (T3)||2,169||2,261||4.3%|
|Apartments with lift||2,603||2,703||3.9%|
|Apartments without lift||2,112||2,186||3.5%|
|1-bedroom apartments (T1)||3,135||3,232||3.1%|
|Apartments with garden and pool||2,897||2,977||2.7%|
|2-bedroom apartments (T2)||2,404||2,459||2.3%|
|Apartments with 4 or more bedrooms (T4+)||2,904||2,893||-0.4%|
Prices rose for most types of property, and there is a curious fact that should be highlighted. In the last year, the value per square metre for flats without bedrooms (studio flats) rose by around 4.9%, from 3,680 to 3,860 euros/m2. In many cases, this type of house corresponds to lofts and open spaces, a typology that is increasingly sought after by millennials, both Portuguese and those from abroad, as well as by senior professionals who come to Portugal to work, without their families, for example, and who are looking for a space of this type to stay for shorter periods of time and which may explain this trend. They are not necessarily small spaces, but "trendy" products and well located.
Flats with 4 bedrooms or more were the only ones to register a drop in price. The value per m2 fell 0.4%, from 2,904 to 2,893 euros, something that may be related to the buyers' own profile of this type of home. This buyer profile is likely to give preference, in this case, to villas instead of apartments bearing in mind that you they will probably benefit from relatively equal areas, with several bedrooms, but with the benefit of having a garden or outdoor space.
The data provided by idealista/data reveals yet another difference, which is particularly interesting, as far as price rises are concerned. Apartments or flats with a garden but without a swimming pool saw their price per m2 rise more than the flats with a garden and a swimming pool: in the first case, the values rose by 5.6%, (from 2,125 to 2,245 euros per m2) and, in the second case, by 2.7% (from 2,897 to 2,977 euros per m2). This is a trend that will be related to the fact that a house with a swimming pool will mean more maintenance costs, in the future, than a house with only garden and outdoor space.