The Residential Price Index, compiled by the Portuguese national property data bank Confidencial Imobiliário, found that sale prices of properties in mainland Portugal increased by 2.5% in May, compared to the previous month.

The price of houses rose to €1,761 per square metre, which represents the largest chain growth in the market in the last two years. It also “marks an acceleration compared to what has been registered since the beginning of the pandemic, a period in which monthly variations did not exceed 1%”, said the report.

While the variation from the month of April shows an acceleration in the increase of house prices, Ricardo Guimarães, director of Confidencial Imobiliário, says that, despite the monthly rise being “very expressive”, it is necessary to understand “if it is an isolated situation”.

“In the last three months, there was an increase of around 25% in transactions, which ends up reflecting a positive behaviour of prices. We will now have to wait to see if this behaviour, whether in prices or sales, proceeds, or if, perhaps, it could have been a more immediate reaction to the deconfinement,” explains Guimarães.

This was the second month in which the monthly rate of change in prices intensified, reflecting a recovery in the year-on-year increase, which reached 4.6% in May. The year-on-year valuation has been losing strength since March 2020, when it stood at 15.6%, and in February 2021 reached a minimum of 2.6%.

While house prices are still going up, experts predict that there will be a significant drop in September, with the end of the moratoriums expected to cause supply to overtake demand (read more here).

Get in touch with Algarve Home Sales for advice on the best time to buy a property in Portugal. In the meantime, why not browse our selection of properties, here.