Between 2020 and 2023, more than twice as many new homes were transacted in the North region compared to Greater Lisbon. But the total value of sales made is higher in the capital compared to the North. Cities in the North region were able to remain more dynamic in real estate development and more active in licensing.
The Northern region of Portugal has transacted a total of 38,395 new homes since the pandemic, a value that represents more than double the new homes that were sold in the period from 2020 to 2023 in the Greater Lisbon area (16,792), a difference of 21,603 new homes transacted, according to data provided by the National Statistics Institute (INE). “There are some cities in the North region that have had the capacity to remain attractive and dynamic for real estate development, even in recent years”, says Ricardo Guimarães, director of Confidencial Imobiliário, speaking to Jornal Económico (JE).
Among the various cities in the region, the person responsible highlights three that, in his opinion, impacted the new housing sales market. Vila Nova de Gaia, which it considers to have been the “capital of real estate development in 2023”, has recorded a greater volume of new projects entering the market than in Lisbon and Porto. “It is a city that has very attractive characteristics and can move quickly towards construction. Even so, I think it performed beyond what was expected given the national reality”, he highlights.
Regarding Porto, the director of Confidencial Imobiliário considers that it has always been a very “aggressive city in a good way” from a licensing point of view, also classifying the city of Braga as “strong” in this aspect.
In 2021, the North region saw a total of 9,604 new properties transacted compared to 3,725 in Greater Lisbon, and in the following two years the volume of sales increased in both regions: the North in 2022 (10,288); Greater Lisbon (4,493) and last year the North saw 10,474 new house transactions, compared to 4,550 in Greater Lisbon.
Analyzing INE data that reports up to 2009, the year with the highest volume of new house transactions was 2010 for both regions: the North (12,016) and Greater Lisbon (8,899).
If the North has a clear advantage in the number of new house transactions, Greater Lisbon wins in terms of the volume of investment made in the last four years, totaling 7.9 billion euros, compared to the North region (7 .4 billion euros). Furthermore, in 2021 alone the North (1.8 billion euros) surpassed the Greater Lisbon area (1.7 billion euros).
The biggest record of investment made took place precisely in 2023, with the North observing a volume of 2.2 billion euros, compared to 2.4 billion euros in Greater Lisbon, this being also the year in which more new properties were transacted in the two regions: North (10,474) and Greater Lisbon (4,550).
“I think it will be a year of some stability and maintenance of activity levels compared to 2023. I think that in relation to real estate development it was necessary that there actually be a program to improve attractiveness conditions, such as, for example, reducing of VAT”, says Ricardo Guimarães.
Are used homes more expensive than new ones? “Distance between markets has narrowed”
The price of used properties increased by 8.7%, compared to new homes (6.6%). For the director of Confidencial Imobiliário, this does not mean that the value of existing housing is becoming higher than new construction. “Used properties are not more expensive than new ones, the pace of price growth is different. The distance between one market and another has narrowed”, highlights the director of Confidencial Imobiliário.
For this manager, the high values of new homes are explained by the increase in construction costs and a market orientation towards a high range. “There is no doubt that the increase in interest rates has the consequence of increasing difficulties in access in the case of more expensive properties and which end up having a ceiling on appreciation potential”, he highlights, highlighting that in this way the more mature and have been expensive for some time now and have reached a price level where the potential for appreciation is lower.
“Families, as they seek to resolve access to housing, directing demand towards cheaper segments, accentuate demand pressure in these markets and end up promoting price increases”, highlights Ricardo Guimarães.
Drop in the number of transactions was concentrated in the largest metropolitan areas
Last year, 136,499 homes were transacted, the lowest value since 2017 (129,833), which meant a total of 28 million euros (-11.9%). In the case of used homes, values also fell to 2017 levels (107,486), compared to 108,380 in 2023, a drop of 21.4%.
Contributing to this decline were the two main regions of the country analyzed by INE: the North, where the number of transactions went from 37,015 in 2022, to 29,241 last year and Greater Lisbon, which in 2022 accounted for 28,688 sales of existing homes and last year it fell to 21,304 transactions.
For Ricardo Guimarães, this drop is explained by the most expensive markets, that is, the metropolitan areas of Lisbon and Porto. “These are the two most expensive markets and where the effect of the increase in housing prices was most felt”, he highlights, adding that with the start of the war, the increase in inflation, uncertainty and the increase in interest rates, there began to be a decrease in the number of transactions.
