A supply shortage pushed property price growth in Portugal to a 12-year high

A supply shortage pushed property price growth in Portugal to a 12-year high
A supply shortage pushed property price growth in Portugal to a 12-year high

Lisbon authorities are promising to speed up the licensing process for new homes to boost supply

The problem of the shortage of homes for sale is particularly serious in the capital city of Lisbon. Photo: Bloomberg LP

Home prices in Portugal posted their biggest annual increase in at least 12 years as a shortage of available properties for sale supported the continued rise in property prices, Bloomberg reported.

House prices rose 13.2 percent year-on-year earlier in the second quarter, data from the country’s statistics institute showed. That’s the biggest increase since the institute began collecting data on the housing market in 2010. Prices rose 3.1 percent from the first quarter.

Builders, including Vanguard Properties, which has invested around €1 billion in Portugal, have blamed the rise in house prices on a shortage of homes caused by long delays in licensing new homes, particularly in the capital Lisbon.

The shortage of homes coincides with growing demand from foreign buyers who have flocked to Portugal in recent years in search of a warm climate and lower cost of living. These buyers are more likely to pay more than twice as much for a home in Lisbon as local residents, the statistics institute said in April.

Joana Almeida, a municipal councilor in Lisbon, told a property conference on Thursday that the delays are a fact, adding that the city is working hard to speed up the licensing process to increase the supply of homes.

“We need time to show good results,” noted Almeida, who is part of a team that came to power only a year ago.

The Portuguese government has excluded property purchases in Lisbon and the northern city of Oporto from the so-called “golden visa” program in an attempt to regulate demand. The government has also imposed a 2% cap on rent increases next year in an attempt to rein in the rising cost of living.

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Tags: supply shortage pushed property price growth Portugal #12year high

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