The Portuguese real estate market has demonstrated remarkable resilience in the face of global economic instability. Despite challenges such as rising interest rates and inflation, the market saw an unprecedented increase in house sale prices, marking an 18.7% rise in 2022, the highest annual increase in 30 years. This surge in prices was accompanied by a significant drop in the number of houses for sale, reaching a 15-year low, which has further fueled price increases across regions, with Funchal and Setúbal leading the price dynamics.
The government has responded with measures to mitigate the impact of rising interest rates on mortgages, offering various restructuring options to homeowners. However, with the European Central Bank predicting a 9% fall in home prices across the Eurozone over the next two years, the market faces a period of adjustment. Despite these challenges, the rental market has seen a sharp increase in demand, particularly in major cities like Lisbon, where supply has struggled to keep up, pushing rents higher. This situation underscores the ongoing attractiveness of the Portuguese real estate market, even as it navigates through uncertain economic waters.
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