Decline of house supply with increasing demand

The gap between supply and demand causes an increase in real estate prices

The supply of homes on the purchasing and selling markets and leasing declined further in continental Portugal, while demand continued to increase in both markets, according to "Portuguese Housing Market Survey" (PHMs). The pace difference between demand and supply has caused an increase in real estate purchase prices and lease, stated the survey conducted in October, based on 150 companies´ respondents in the real estate sector.

The real estate market analyzed three regions of mainland Portugal: Lisbon, Porto and Algarve, registered a continuous increase in demand. The survey found that this is the third month where the volume of offers on the market falls, which concludes that this dynamism has been reflected mainly in prices, which continue to increase, but this does not affect sales for the time being.

The market transactions continued to grow in October, registering the highest growth since September 2015. There has also been an increase in demand in the rental market, in contrast to a decreasing supply by the part of the owners. Like the property purchase and sale market, the gap between supply and demand also had an impact on the market, causing a rise in property rentals, which increased for 18 consecutive months.

Economist Simon Rubinshon of the Royal Institution of Chartered Surveyors (RICS) believes that demand for housing in Portugal should continue to rise due to continuous improvement in the labor market and the latest growth forecasts for the Portuguese economy. Real estate entrepreneurs, surveyed at PHMS, anticipate the possibility of a high price rise in Lisbon in the buying and selling market over the next year.

Source: Diário de Notícias