The average price of property rocketed by 15.4 percent in the space of a year in Portugal. But while real estate continues to result in relatively decent profits for sellers, new data also indicates that their expectations of the property’s worth and its actual selling price have widened further this past year.
Expectations in Portugal are usually that a potential buyer of property will offer less than the price listed by the seller.
A decade ago, prior to the economic crisis, the so-called buyer-seller expectation gap stood at around 10 percent.
But since the onset of the well-documented property market boom, sellers appear to have even greater unrealistic prospects of their property’s actual value.
In Lisbon, this differential between buyers and sellers has now climbed to 22 percent, while in Porto, this figure has risen to as high as 30 percent.
These values are calculated by comparing declared values once property deeds are signed against values contained on the Residential Information System, showing listing prices.
According to real estate market analysts Confidencial Imobiliário (CI) these figures follow on separate numbers published earlier in the week that showed average property prices in Portugal ballooned by 15.4 percent in the space of 12 months leading up to December 2018.
Accumulated increases since late 2013, now stand at 46 percent CI said, yet sellers now appear to have an even greater distorted perception of the market values of their property.
In comments to Público, CI Director Ricardo Guimarães confirmed this view.
He believes that owners compare their properties with others being listed, and believing their homes are better value, results in over-inflation of prices with each owner being biased towards their own property.
But despite this opinion, the CI Director believes we have not seen the end of rising property prices in Portugal, only at a more sedate rate. This view is further substantiated by the recent Portuguese Housing Market Survey, which found that prices are set to start levelling out, though maintaining an upward curve.
Meanwhile, rental properties have also continued to record price increases, and rose by 37 percent in 2018 when compared with the previous year.
The average rent in Portugal currently stands at €1,106 per month. The five districts with the highest average rental prices in 2018 are Lisbon, Porto, Faro, Beja and Setúbal.
In other property-related news, investment attracted through Portugal’s golden visa scheme dropped by 30 percent in February, falling 62 million euros in relation to the same month in 2018. The figure was also down 27 percent on January. By nationalities, China leads with a total of 4,159 permits since the introduction of the programme, followed by Brazil, Turkey, South Africa and Russia.