House prices push families to the outskirts

The limitations of the supply of real estate and the increase in prices in the centres of the main cities are pushing many Portuguese families to a life in the outskirts. This is a trend that, according to the real estate agency Century 21, is here to stay. The agency anticipates that prices will rise more significantly in the areas surrounding cities such as Lisbon and Porto.

According to Century 21, "there are not enough new constructions with respect to the demand and purchasing power of the Portuguese … there is a clear bet on housing in large cities for parts of the upper and upper-middle class population, which responds to the needs of a small part of the national and international clients," the agency said in a statement. Such a scenario would lead families to live in the outskirts of cities, stimulating the rise in prices in those areas.

"It is the young families, looking for their first home on the market, that face the greatest difficulties when it comes to finding residential solutions adjusted to their needs, aspirations and purchasing power,” explains Ricardo Sousa, CEO of Century 21 Portugal, who says it is necessary to create solutions suitable for the purchasing power of middle and lower-middle class families.

The trend towards renovation and new constructions

The renovation of buildings and new constructions will also be a trend in 2018. According to the results of Century 21, "both are expected to register a significant increase in the number of residential transactions, due to the shortage of properties with values adjusted to current demand, for the middle and lower-middle classes". This is a dynamic that could reduce the pressure on prices, especially for second-hand properties, which are beginning to compete directly with new properties. "This will make it more difficult for owners of second-hand houses to sell them at prices comparable to those of refurbished or new properties," the agency concludes.

Who buys in Portugal?

The national network Century 21 registered 10,988 real estate transactions last year and an average sale value of 129,000 euro. The turnover of the real estate network exceeded 35 million euro, representing an increase of 35% compared with the 26 million euro recorded in 2016.

In 2017, the agency reveals, about 55% of the Portuguese who bought a house were between 40 and 50 years old and most were looking for 2- or 3-bedroom apartments. A quarter of the almost 11,000 transactions were worth less than 100,000 euro, while 42% were between 100,000 and 200,000 euro. Only 26.3% of buyers opted for real estate between 200,000 and 500,000 euro and only 5.3% of acquisitions made had values above 500,000 euro.

Foreigners also have an important role. International transactions represent around 19% of the total transactions of the Century 21 network and increased by 9% to 2,087, compared with 1,923 transactions of international clients made the previous year. French, Brazilian, Chinese, Belgian and English are the ones who buy the most.

Rentals in freefall

The number of rental operations has fallen sharply, around 18%, with 2,870 transactions compared with 3,500 in 2016, "accentuating the decreasing rental trend that has also been seen in previous years," says Century 21.

In the agency's national network, two-bedroom properties were the most sought-after typology in 2017 and the average rental value, at the national level, was set at 598 euro, which translates into a fall of 10.7% in relation to the national average of 670 euro, recorded in 2016.