In the end, it seems that the price of housing in Portugal is not "so high". This was the statement from the European Commission (EC), for whom the recovery of housing prices in Portugal, recorded in 2016 and 2017, corresponds to a "correction of previously low values", a situation that can still affect domestic demand.
"The risks associated with the renewed dynamism in the residential sector seem to be under control at the moment," the EC states in a report on Portugal cited by the Lusa news agency. However, if the accelerated pace of real housing price growth continues in the medium term, a more exhaustive monitoring of this indicator will be recommendable.
For the EC, the increase in the prices of houses has been "mainly restricted to tourist areas", since in general the values of the residential sector "are still recovering from the drop during the crisis."
"The fact that the concentration of the price increase is in tourist areas, including projects for the transformation of residential properties into accommodation facilities, suggests that the real estate market is currently driven by external demand and investments related to tourism," the report reveals, adding that "domestic factors seem much weaker since the stock of mortgages is still in decline."
According to the report, the price increase in 2016 and 2017 "comes after a long period of decline and now is perceived as a correction of past devaluation rather than an accumulation of new imbalances." According to the EC’s perspective, the real price of houses remains "undervalued".
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