These last weeks I have seen many questions related to real estate in Portugal and the pandemic. This is why I wrote this blog post. Have real estate prices in Portugal decreased due to COVID-19 ? What are the effects of this pandemic on the real estate market in Portugal ? We talk about it today in this article. 

Real estate prices in Portugal in 2020 (1st year Covid) 

Despite the pandemic, the surge in home prices in Portugal seen since 2011 has not been stopped by the health crisis. The increase in real estate prices in Portugal has continued to grow with +9.90% between 2020 and 2019. Below are the price increases observed over the last 4 years (source : ine.pt): 

• 2017 : +7.62%
• 2018 : + 6.87%
• 2019 : + 8.53%
• 2020 : +9.90%

Real estate prices in Portugal in 2021 (2nd year Covid)

Real estate in Portugal in 2021, like in 2020, is not currently subject to a price drop.  Currently, the price increase continues although it is slightly lower than in the previous period with + 8.3% if we take the sliding year from June 2020 to June 2021 (source: idealista.pt)

Portugal remains a very popular real estate destination for investors in 2021. 

A new demand

The covid-19 has reminded everyone of the importance of the home, the famous “home sweat home”. The essential place of the latter in our lives and the requirements to make this home a place we feel good. As a result, real estate transactions have increased for homes and regions offering a better “quality of life” and Portugal attracts a large number of people for these reasons.

Homes with spacious outdoors spaces : terraces or gardens, a pleasant office room, a spacious living room … have actually not seen their prices collapse and even the opposite due to a very high demand.

Furthermore, the location of the property remains unsurprisingly essential. In these covid times, there are new concerns in terms of location :

• Being outside the big cities but on the outskirts. Thus, the outlying areas of Lisbon and Porto have seen their demand increase since the covid,
• Being on the seaside,
• The distance between work and home has become a secondary consideration. It is no longer so important for the majority of people. Why is this? With a massive development of teleworking, it has broken the distance barriers and people, not ready to move to Portugal due to their work, have finally realized that it was possible ! With remote working, mobility has increased and it is easier to move abroad and keep his work. 

This is why, the Portugal’s regions offering a nice living environment with nature, beach, sun… have been even more popular since the pandemic. Logically, this increase in demand has resulted in an increase in the price of real estate in Portugal.

Continued demand despite the confinements

Due to covid-19, the first quarter of 2021 has been very complicated for Portugal with a second strict confinement limiting a lot the moving with the other countries. Although the desire to find a property in Portugal was real, the transactions could not really be realized because the trips, visits were not possible. This situation put foreigner’s investment projects on hold. But this didn’t stop their intention to buy. 

Also, the real estate market in Portugal continued to be supported by a strong demand from nationals for properties with more exteriors, which we were talking about just before.

Conclusion

Although it is impossible to predict the future with this unprecedented crisis, real estate in Portugal has shown that it was strong despite this crisis.

In less than ten years, thanks to tourism and real estate, Portugal has emerged from its economic crisis. It has become an essential destination for real estate investment.

Even if almost half of the real estate transactions in Portugal are made by foreigners, mainly : English, French, Brazilians, Chinese. During the crisis, we could see the return of Portuguese buyers and the real estate market in Portugal did not collapse as it could have happened.

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