You read this headline and think – this is obviously a huge bubble that is going to burst at any moment. Right? Not really. Read on to understand why we think real estate prices in Portugal are not going down anywhere soon?

In the wake of the 2008 global financial crisis new construction contracted tremendously and never recovered since. The average number of new units built annually between 2001-10 fell 83% in the following decade. And this was before the recent burst of inflation that hit hard construction materials combined with a labor shortage of 60.000+ workers.

On the second hand real market we have another big issue affecting supply: thousands of properties are not marketable because courts aren’t capable of dealing with litigation between heirs.
It’s fairly obvious why we don’t foresee big increases in supply. What about demand? Well the number of foreign residents in Portugal is skyrocketing. A few decades ago the Brits, then the French, and the Brazilians discovered Portugal. And now it’s the Americans whose number doubled in 2022. Foreigners accounted for 16% of all of last year’s residential real estate transactions.