Portugal’s housing prices continue to rise, fuelled by surging demand as well as improved economic conditions. Property prices in Portugal rose by 7.92% during the year to Q3 2019, up from y-o-y increases of 7.38% in Q2 2019, 5.96% in Q1 2019, 5.39% in Q4 2018, and 4.7% in Q3 2018. In fact, it was the highest growth in more than a decade. House prices increased 2.47% q-o-q in Q3 2019.

All regions of Portugal have experienced significant house price falls during the last decade. And despite some recovery in 2009, house prices started to fall again in the last quarter of 2010. Prices only began to recover in Q4 2014, after 13 consecutive quarters of y-o-y house price declines.

Demand and supply are surging. In 2018, the total number of housing transactions in Portugal rose strongly by 16.6% to 178,691 units from a year earlier, according to the Instituto Nacional de Estatistica. Likewise, the value of transactions surged 24.4% y-o-y to €24.06 billion (US$26.81 billion) over the same period. Clearly the new wealth tax introduced in 2017, applicable to higher-valued properties, has in fact had a negligible impact on the luxury housing market.

In the first three quarters of 2019, the number of licensed dwelling permits in Portugal soared by more than 19% to 17,558 units from a year earlier, after rising by about 40% in 2018.