The latest sales figures are in: house sales in Portugal fell by 23% in the second quarter of the year, an “official” sign of the Covid-19 pandemic. The biggest drop was registered in the Algarve region.
According to the INE (National Statistical Institute of Portugal), a total of 33,398 houses were sold in Portugal between April and June this year, well below the 43,352 registered between January and March.
All areas in the country saw a decline in house sales, but the greatest falls were registered in the Algarve and Madeira. In the Algarve, data shows a decrease of 38% in the number of houses sold in the second quarter of the year. The Alentejo region showed the most resilience, with a drop of 12.6%.
Transactions drop but prices remain high
Nevertheless, prices remain high, although there is a clear decrease in the rate of increase. According to the INE, the Housing Price Index registered a year-on-year increase of 7.8%.
“It is not so surprising that, even during the pandemic, residential real estate continues to record increases,” noted Luís Lima, president of APEMIP (Portuguese Real Estate Professionals and Brokers Association).
As for the drop in sales, Lima believes that this situation wouldn't have occured if it weren't for Covid-19. “There was nothing to predict that the real estate sector would register this behaviour during the course of 2020.”
He added: “We were prepared for a slight increase in the number of transactions, possibly remaining the same, due to the lack of stock that was felt, but never for breaks of this nature that were caused exclusively by the confinement period and the State of Emergency that we live in, and that prevented many transactions from taking place.”
Although concerned with the impact that the pandemic will have on the economy, and consequently on the real estate market, Luís Lima believes that this sector continues to be a good investment option and that this may be a good time to look into the long-term rental market to meet growing demand.
The team at Algarve Home Sales is available to provide advice and any support when it comes to buying or selling a home in Portugal. Feel free to get in touch here.
