Renting or buying a property, especially in Portugal’s cities, has become an unachievable dream for many people as prices continue to rise.
The construction sector gets the blame from Luís Lima, the head of the nation’s estate agents’ association.
"We have already presented a study to the state which says that there are around 70,000 new homes missing in order to have market equilibrium. Prices are growing because there is a lot of demand and little supply," claims Lima.
These ‘missing homes’ are at the national level, but "more than half are in Lisbon and Porto, where more than 50% of demand is concentrated."
The lack of houses can only be solved with an increase in new builds. Lima has no doubt that am urgent building programme is needed, especially for the middle class and young people.
Reis Campos, the president of the Construction and Public Works Association, shares this view and broadly agrees with the 70,000 estimate. Although there is evidence that new construction is recovering, the number of houses is well below what is needed to supply current demand.
Reis Campos said that at the beginning of this century more than 100,000 houses were built each year, but fell during the recession for sound commercial reasons.
"In 2011, only 17,000 houses were built, and during 2013/2014/2015 we have been building around 7,000 to 8,000 houses per year, growing in 2016 and 2017," notes Campos.
The Portuguese Association of Real Estate Developers and Promoters (APPII) reckons there is a huge opportunity for real estate developers as there is high demand from the middle class.
Hugo Santos Ferreira, executive vice president of APPII, has no doubt that one of the "big trends" this year is new construction outside urban centers for middle class buyers – not just Portuguese.
"If you think that it is only the Portuguese middle class that is in the market for housing, we have seen a new wave of middle-class foreign investors, who now are seeking a permanent or second residence in Portugal," says Ferreira.
"Among these foreign middle class buyers are many French, but also Nordic, like Icelanders, Scandinavians and Norwegians."
Ferreira believes also that there is a return to projects outside the main urban centres, stating that several promoters and real estate investors, national and foreign, have been working on new locations outside the prime areas.
Ferreira offers some hope, as long as people are content to buy outside the hotspots, "2018 will be marked by the return of some projects outside the high value segment which aim to to reach a wider audience. This trend is of the utmost importance and will greatly contribute to building market equilibrium for everyone which, if so, will certainly bring a more sustainable and long-term market."
