Portugal House Prices Surge 7.8% in Q2

Portugal house prices rose 7.8% year-on-year in Q2 2024, signaling a return to growth after a brief slowdown, per INE data.

In a remarkable resurgence, Portugal house prices have surged by 7.8% in the second quarter of this year, year-on-year, signaling a robust recovery from a brief period of stagnation, as reported by the National Statistics Institute (INE). The INE's statement elucidates that “In the second quarter of 2024, the House Price Index (IPHab) experienced a year-on-year increase of 7.8%, representing an acceleration of 0.8 percentage points compared to the preceding quarter.”

Delving deeper into the data, it becomes evident that the price trajectory for existing homes outpaced that of new constructions, with an impressive 8.3% increase for the former, juxtaposed against a more modest 6.6% for the latter. Furthermore, when compared to the previous quarter, the IPHab exhibited a commendable growth of 3.9%, a notable uptick from the 0.6% change recorded in the prior quarter.

Analyzing the market by category reveals a striking parity in price increases for both existing and new homes, at 3.9% and 3.8%, respectively. Between April and June 2024, a staggering 37,125 homes changed hands, culminating in a total transaction value of 7.9 billion euros. This figure marks a significant year-on-year increase of 10.4% in the number of transactions and an impressive 14.1% in total value, as elucidated by the INE.

In terms of market dynamics, the institutional household sector accounted for a substantial 31,948 units, representing 86.1% of total acquisitions, with a corresponding monetary value of 6.7 billion euros, or 85.4% of the total. Interestingly, the second quarter of 2024 saw foreign buyers, those with tax domiciles outside Portugal, acquiring 2,464 properties—6.6% of the total—reflecting a slight year-on-year decline of 2.8%.

Regionally, the North of Portugal emerged as a significant player, with 10,995 transactions, thereby constituting 29.6% of total housing sales, an increase of 1.0 percentage points compared to the same period last year. Meanwhile, Greater Lisbon recorded 7,031 transactions, maintaining its share at 18.9% of the total, a figure consistent with the previous year. Notably, housing transactions in Greater Lisbon amounted to 2.5 billion euros, representing 32.2% of the total, albeit a decrease of 0.7 percentage points year-on-year.

In the North, the value of transacted properties escalated to 1.9 billion euros, while the Algarve region reported transactions totaling 912 million euros, with the former experiencing a year-on-year increase in relative weight of 1.3 percentage points, contrasted by a similar reduction in the Algarve's share. This intricate tapestry of data not only underscores the resilience of the Portugal housing market but also invites further inquiry into the underlying factors driving these trends.