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The Portuguese Real Estate Market in June

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While Portugal, along with much of Europe, began to emerge slowly from their Covid-19 confinement, the Portuguese corporate real estate investment sector seemingly remained in the doldrums. Housing sales and new rentals fell sharply during the pandemic, according to data from the country’s statistics bureau, the National Statistics Institute (INE). Perhaps unsurprisingly, the number of home sales decreased y-o-y in April in every region in Portugal. In particular, sales in the Algarve (-24.3%) and the Autonomous Region of Madeira (-20.5%) were hit hard.

However, last May housing sales rose by 23% month-on-month. On the other hand, prices are also showing some signs of recuperation with an increase of 0.9% last month.

Other positive fact, is that according to statistics from Portugal’s Foreigners and Border Service (SEF), investment in the country’s golden visa program nearly tripled in May to 146 million euros. Total investments from the program reached €146,168,473.40, an increase of 192% y-oy and the highest monthly volume of investments since March 2017 (192.4 million euros).

In a survey carried out last month, the consultancy Ernst & Young (EY), stated that the economic damage wreaked by Covid-19 would likely last for approximately two years. Most of the study’s respondents answered that while there will be damage to confidence in the short-term, corporate investment plans are likely to resume after a brief hiatus. About 50% of the respondents believe that the crisis affecting the sector will last for less than twelve months, returning to pre-pandemic highs within two years. Demand for homes is forecast to fall by 40%, while prices should decrease by 20% over the next six months, with an eventual rebound over the following two years.  Luxury homes are expected to avoid much of the impact, as those sales are primarily driven by foreign investors.

The office market is also expected to drop by 10%, with a slow recovery over the next two years. Prices, on the other hand, are expected to hold relatively steady considering the lack of supply in the market before the pandemic. The demand for offices is also likely to drop by 20%, again with a recovery over the next 24 months.

The worst-hit sectors are likely to be retail and hospitality. Demand is expected to fall by 40%, with a 30% decrease in asset values, a 50% decrease in RevPAR and a deeper downturn over the next 24 months.


The one significant transaction of the month saw the Oeiras Town Council sell a 21,000-m2 plot of land in the neighbourhood of Esparagal for 14 million euros at an auction held this week. The amount was 40% above the base price of 10 million euros. The plot of land is located in the joint parishes of Oeiras and São Julião da Barra, Paço de Arcos e Caxias. The municipality postponed the first two auctions due to the Covid-19 pandemic and lockdown.


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