The real estate landscape in Portugal, particularly in the regions of Algarve, Lisbon, and Madeira, has recently faced a significant downturn, with house sales plummeting by over 25%. The latest data from the National Statistics Institute (INE) paints a sobering picture of the property market in these sought-after areas.
A Notable Decline in Home Sales
Between April and June of 2023, a total of 33,624 homes were transacted in these regions, marking a stark 23% decrease compared to the same period the previous year. This decline is raising eyebrows and prompting questions about the factors contributing to this substantial drop in real estate transactions.
Among the three regions, the Algarve bore the brunt of the decline. This picturesque coastal area saw a 29% drop in home sales during the second quarter of 2023, compared to the same period in 2022. Moreover, the Algarve also experienced a significant 21% reduction in housing investment, further emphasizing the challenges faced by this region’s real estate sector.
Madeira, the beautiful Autonomous Region, didn’t escape the downturn either. In the same period, a total of 795 family homes were transacted, representing a staggering 28% decrease compared to the previous year. This dip in home sales had a knock-on effect, resulting in an 18% reduction in housing investments in Madeira.
The Lisbon Metropolitan Area, a bustling hub of activity, also saw a sharp decline in real estate transactions, with a 27% drop in the number of homes sold during the second quarter of 2023. The region witnessed only 9,696 house deals during this period, marking the lowest sales numbers since the end of 2016. This exclusion only takes into account the second quarter of 2020, which coincided with the onset of the Covid-19 pandemic. Consequently, housing investment in Greater Lisbon dwindled by 16%, falling to €2,931,894 euros.
A Broader Trend
This dip in real estate transactions is not confined to these regions alone. Examining the map of Portugal, it becomes apparent that in the second quarter of 2023, all regions experienced a year-on-year reduction in both the number and value of accommodation transactions. This trend, as confirmed by the Portuguese statistics office, underscores the challenges the entire country is facing in the real estate sector.
As the real estate market in Algarve, Lisbon, and Madeira faces a significant slump, it prompts reflection on the broader economic and societal factors contributing to this decline. The reasons behind this drop in home sales and housing investments may vary, but the impact is undeniable.
Real estate professionals, investors, and policymakers are closely monitoring the situation, seeking solutions to revitalize these markets. The coming months will be crucial in determining whether this decline is a temporary setback or a more enduring shift in the real estate landscape of these stunning Portuguese regions.