Construction in Portugal has endured strange times, navigating high inflation, rising interest rates and unstable legislation. But according to recent data, investment in 2023 has dropped by 6.5%.

Figures from the National Institute of Statistics (INE) show that the Gross Fixed Capital Formation (GCFC) in construction in Portugal – one of the components that measure investment – fell by 6.5%, year-on-year, at the start of 2023.

It's the most significant drop since 2014, thanks to several factors triggered by the current economic situation. According to the INE, reasons behind the decline include:

• More delays due to rescheduled works for the Recovery and Resilience Plan (PPR);
• No response in public tenders due to prices being misaligned with the current reality;
• Property purchases being more difficult for Portuguese families due to rising interest rates;
• A drop in residential construction.

After investment in construction slowed down during the pandemic, in 2020 and 2021, in 2022 it was almost stagnant. Not since the first quarter of 2014 had the drop in construction investment in Portugal been so significant than in 2023.

The rising costs of construction had already been reported last year by the same institute, and with fewer houses being built, the lack of properties on the Portuguese market is a real issue for potential buyers.

With a price drop being unlikely, real estate agents with local expertise are well-placed to find you the perfect property, at the best price. Contact the team at Algarve Home Sales.