Portugal continues to be an attractive country to live in, as well as invest in, despite the uncertain economic and political context. But the lack of homes for sale is a structural problem with no end in sight, as new home construction is not keeping up with demand in the country. This is precisely where the housing crisis in Portugal lies: even with house sales falling 25% in 2023, prices increased by more than 10%, reflecting the scarcity of properties, reveals a study by multibillionaire Warren Buffet's real estate agency.
Although there are good prospects for the performance of the Portuguese real estate market in 2024, the truth is that there has been a drop in the sale of houses in Portugal of around 25%, reveals the Real Estate Report 2024 prepared by Berkshire Hathaway HomeServices, the real estate agency owned by Buffet. This drop in housing transactions in Portugal reflects a reduction in demand for homes in the country, which was not enough to lower the cost of housing, even in the more expensive market segment.
In 2023, “prices increased by more than 10% compared to 2022, driving the average price per square metre to 4,800 euros, with peaks of up to 10,000 euros in some areas”, highlights César Santos, CEO of Berkshire Hathaway HomeServices Atlantic Portugal, quoted in a statement. This happens, above all, because Portugal suffers from a structurally scarce supply of homes for sale.
The Lisbon real estate market is highlighted in the report as being “attractive, but characterised by an enormous challenge: the significant scarcity of properties”. In the capital alone, around 300,000 properties are missing and the pace of construction is not keeping up with demand, resulting in a “significant rise in prices”. This entire scenario, associated with the current political and economic instability experienced in the country, “contributed to a significant decrease in property sales in 2023”, concludes the document.
Foreigners help Portugal look ahead in 2024 with optimism
Despite global uncertainties, Michael Vincent, CEO and president of Berkshire Hathaway HomeServices Portugal Property, looks at the Portuguese market with confidence: “Portugal continues to be a reference destination. We are well positioned to face the challenges and capitalise on the opportunities in 2024. Foreigners want to live out their retirement in Portugal”, he states.
Therefore, the growing interest of foreigners, including digital nomads , is one of the reasons that makes experts look at the Portuguese real estate market with optimism – despite the end of golden visas and the non-habitual residents regime a few months ago. According to the report, today, there are more than 700 thousand foreigners living in Portugal and who value factors such as the climate, low crime rate and the beauty of the Portuguese coast. And they prefer, above all, to buy houses close to Lisbon and Cascais.
What stands out is that Americans are the most prominent foreign buyers. "In 2023, 40% of foreign buyers came from the US, particularly from New York and California, followed by buyers from France and the UK. Many of these buyers intend to rent out their homes and are therefore looking for properties in excellent condition," the document states.