Residential real estate
The cost of housing in Portugal is on the rise, but the number of dwelling transactions has been diminishing since 2021. This demonstrates the incapacity felt by the majority of the Portuguese to purchase or restore a private residence, more than 56 percent of which confessing that their expectations regarding buying or selling a house in 2023 have not been met. The lack of housing supply, together with the continuously high demand, partially explains the increase in housing costs. Rising interest rates implied in housing loans are also a contributing factor to this predicament. The Algarve and the metropolitan area of Lisbon are the regions of Portugal with the highest median values of bank appraisals on housing, even though this tendency has been escalating in the entire country. Likewise, these two regions are some of the most expensive when it comes to renting a house. Despite the efforts made by the Portuguese government to better the difficult housing situation, namely via the program Mais Habitação, the gap between disposable income and the price of houses to buy and rent is still too big for the number of transactions to increase.Commercial real estate
Similarly to residential real estate, the retail real estate segment has been presenting a decreasing number of deals due to high prime rents. Tourism and hospitality attracted the most real estate investment in 2022, followed by the office sector. With more than two thousand hotels in Portugal, and with the majority of tourists being international, the average cost of overnight accommodation and the revenue per available room (RevPAR) have both increased.Office real estate in Lisbon has shown an expansion in prime headline rents, while the highest take-up was found in the market of Parque das Nações in 2023. At the same time, the development of e-commerce in Portugal has contributed to the growth of the industrial and logistics real estate sector take-up, which was almost 308 thousand square meters in 2023.
