In a recent report by the consultant imovendo, the suspension of the moratórias – loan repayments that include household mortgages – until September 2021 could have an erosive effect on house prices in Portugal.

“This effect will be seen mainly in the apartment segment, where that erosion is already felt, a reality that will tend to worsen as the moratoriums end and the real estate supply overtakes residential demand,” noted the report.

The moratoriums were suspended until September this year, with the consultants predicting that the market will see a turnaround: prices will drop and new investment opportunities at more competitive prices will emerge.

"The expected fall in prices is also justified by the average time to advertise properties, which continues to expand, especially in the main national real estate markets,” added the consulting company.

Moratoriums suspended
Due to the pandemic, the Portuguese government first suspended loan repayments until March 2021 to avoid bad debt. It then announced an extension by another six months, until September.

The suspension can be applied to bank loans, including on household mortgages. Families and companies have been benefitting from the non-payment of capital instalments on loans, but will have to start paying interest in March.

For buyers, this could mean holding out for another six to nine months until house prices drop. For sellers, the optimum selling window could be before September this year.

Whether you’re buying or selling, contact the team at Algarve Home Sales here for advice on the Portuguese property market.