Increase in supply in real estate market will slow down price increases

The increase in supply in the real estate market is expected to slow the rise in prices and rule out the possibility of a "bubble" scenario in the sector, predicted a head of ERA Portugal.

"Many of the construction decisions that have been taken in the last years and that are being taken this year will finally produce the placement of new properties in the market," said João Pedro Pereira, of the Executive Commission of the real estate, in statements to Lusa. Products that are "welcome and will make it slow down the price growth in the most expensive areas and improve the quality of housing in Portugal."

Estimating the “appearance of more product offer in the market if the legal and fiscal framework remains”, the specialist admits that, in the historical zones, supply will continue to arise through rehabilitation, "even because there is no room for new construction."

João Pereira removes a scenario of "bubble" in the market, referring to a hypothesis put by people who "do not take into account the fact that supply in the real estate market takes many years to adjust to the demand" given the time between the decision and completion of construction. "The adjustment of supply will compensate for the increase in demand, but, unlike other products, in the real estate market this adjustment takes two years, three years to be done," he recalled.

The official believes that the internationalization of the real estate market will be to "continue in the next few years" because the location of Portugal in Europe is "very interesting because the economic recovery helped in predicting stability conditions would be maintained" and brought new investors. This is a "positive" situation because it puts the country in the global market, "brings more liquidity", "greater professionalism and also greater demand from consumers."