In this article, I want to share with you a simple yet meaningful insight into the real estate market in Portugal!
Did you know that during the year 2022, a total of 170,000 properties were transacted throughout the Portuguese territory?
These figures were released by the National Institute of Statistics (INE). While this number might appear low in absolute terms, especially when compared to other globally sought-after investment destinations, it carries substantial significance about the Portuguese real estate landscape.
Let’s delve into interpreting this seemingly raw data, which is, in fact, a revealing and essential factor for understanding the Portuguese market. This knowledge will make a significant difference when you’re considering purchasing property in Portugal. Be sure to read until the end!
Is 170,000 a small number?
Is 170,000 a small number? It depends on how you interpret it! Let’s engage in this exercise together.
Of course, when viewed relatively, this number can be considered high. The real estate sector is thriving and growing each year. In total, these 170,000 transactions in 2022 contributed to almost 32 billion euros, accounting for over 13% of Portugal’s GDP.
Hence, it’s not accurate to label this number as low!
Let’s not forget that Portugal is a relatively small country, both in terms of territory and population. With just over 10 million people residing in the entire nation, it’s about half the population of Greater São Paulo, Brazil.
However, in absolute terms, it might be considered low!
Understanding this context is essential when navigating the real estate market for property purchases. Find out why in the next section!
Why is it considered low in absolute terms?
As a point of comparison, let’s consider the state of Florida in the USA, where I’ve been operating in the real estate market for over 12 years. In 2022, the state of Florida alone transacted over 400,000 properties.
This refers to just one state within the country, Florida. Throughout the entire United States, more than 5 million properties were sold.
Looking at these numbers, it’s easy to comprehend why I interpret 170,000 as a low figure.
And why is it crucial to understand this information when purchasing property in Portugal?
Because the market is “small,” meaning there are fewer properties available for purchase.
The challenge is heightened by the soaring demand that Portugal is currently experiencing, a demand that continues to grow annually due to foreign investors’ interest.
The Portuguese government is working diligently to grant licenses for new constructions and address the escalating demand. However, the number of new licenses issued is not sufficient. It’s worth noting that it takes years for new constructions to be completed and handed over.
How to navigate a restricted and competitive market?
Be prepared to make a purchase! This brings us to the core of this article!
If you’re considering buying property in Portugal, you must approach it understanding that the market is small, restricted, and competitive.
In markets with these characteristics, you need to prepare yourself; otherwise, your purchase offer might not even be considered by property owners.
The concept of “bargaining”, which is common in many cultures, even in Portugal, needs to be set aside or used with extreme caution and strategy these days. You’ll be competing with numerous other buyers.
The importance of credit pre-qualification!
A valuable tip I always emphasize for those genuinely intending to buy property is to undergo credit pre-qualification. This advice applies mainly to those planning to use loans from Portuguese banks to make their purchase, which is the case for most clients who approach me at the real estate agency.
Credit pre-qualification in the real estate sector involves having your basic financial information, such as your income, debts, and credit history, analyzed by a professional in the field. This process determines the maximum amount of money you could potentially borrow from banks to buy a property. Learn all about credit pre-qualification and pre-approval in this article.
Another tip is to have essential documents ready, such as the NIF, for instance!
About CAP International
CAP International is a global real estate agency specializing in Portugal and catering to the Brazilian audience. If you’d like to learn more about purchasing property in Portugal, feel free to get in touch right now and chat with me via WhatsApp: Click here to start the conversation on WhatsApp (My name is Bruna Barros).