Is Portugal a Real Estate Sellers Market?

Article by Portugal residency advisors - Official Residency Partner to KipperTree

01 02 2024

For anyone considering real estate investment in Portugal, understanding the current market dynamics is paramount. The distinction between a buyer’s and a seller’s market plays a pivotal role in shaping investment strategies and potential returns.

Recognizing the prevailing market conditions allows investors to adapt their approach, whether focusing on strategic negotiations in a buyer’s market or positioning themselves advantageously in a competitive seller’s market. Keeping a finger on the pulse of the Portuguese real estate market’s current state is not just advisable; it is essential for making well-informed and successful investment decisions in this dynamic and evolving landscape.

Characteristics of a Buyer's Market

Homes sell slowly

In a buyer’s market, the pace of home sales tends to be slower. This is often due to a higher inventory of available homes compared to the number of potential buyers. With more options for buyers to choose from, sellers may find it takes a longer time to attract the right buyer.

Homes are sold at or under the listed price

In a buyer’s market, sellers may have to be more flexible with their pricing. Homes often sell at or even below the listed price as buyers have more negotiating power. Sellers may need to adjust their expectations and be open to price concessions to attract potential buyers.

The Market is flooded with an abundance of homes

The inventory of available homes is typically higher in a buyer’s market. Sellers face increased competition as there are more properties for buyers to choose from. This abundance of choices gives buyers the advantage in negotiations, allowing them to be more selective in their home purchases.

Decline in home prices

One of the key indicators of a buyer’s market is a decline in home prices. As demand weakens relative to supply, sellers may reduce their prices to make their properties more attractive to potential buyers. This downward pressure on prices is a characteristic feature of a buyer’s market.

Strategies for Sellers

Set a competitive and attractive pricing list 

Invest in staging and presenting your home

Consider offering incentives such as covering closing costs

Offer flexibility in terms and closing dates

Implement a robust marketing strategy 

Strategies for Buyers

Market research to identify properties that offer good value for money

Be prepared to negotiate on price and potentially additional requests

Patience and Selectivity in making a decision

Keep an eye on market trends and be aware of any price reductions

Characteristics of a Seller's Market

Homes are sold rapidly

In a seller’s market, homes tend to fly off the market at a faster pace. The demand for homes exceeds the available supply, leading to a sense of urgency among buyers. This fast-paced environment benefits sellers, who may see their properties sold shortly after being listed.

Properties are sold at or exceed the listed price

Due to high demand, sellers in a seller’s market often have the upper hand in negotiations. This can result in homes selling at or even above the listed price. Bidding wars may occur as multiple buyers compete for the limited inventory, driving prices upward.

Few properties on the market

The scarcity of available homes is a defining feature of a seller’s market. With fewer properties available, buyers face increased competition for the limited options, which can lead to quicker sales and higher prices. Sellers may benefit from this tight market condition, often having more negotiating power.

The upward trend in home prices

A key characteristic of a seller’s market is an overall increase in home prices. The high demand coupled with limited supply puts upward pressure on property values. Sellers may experience appreciation in the value of their homes, making it a favourable market for those looking to sell.

Strategies for Seller's

Pricing your property competitively from the start is crucial

Make your property as appealing as possible

Offering flexibility with closing dates can make your property more attractive

Utilize effective marketing strategies to create a sense of urgency

Strategies for Buyers

Get a pre-approved mortgage to demonstrate your seriousness as a buyer

Act promptly when you find a property that meets your criteria

Be flexible with contingencies, such as home inspections or repairs

Work with a skilled real estate agent with experience in seller’s markets

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Is Portugal a Real Estate Seller's Market?

Absolutely, Portugal is currently experiencing a robust seller’s market in the real estate sector, and several compelling factors affirm this trend.

Firstly, the notable upward pricing trajectory is a significant indicator. According to data from the Portuguese National Statistics Institute (INE), there has been a remarkable 12.8% increase in the average house price in Portugal throughout the year 2023. The Algarve region stands out with an exceptional 18.3% surge in house prices during the same period. This substantial price growth signifies a heightened demand for properties, resulting in an advantageous environment for sellers.

Moreover, the demand for real estate in Portugal is surpassing the available supply. This scarcity is particularly notable in the context of changing consumer habits. Previously, individuals sought quick-to-occupy apartments for long-term living or renting purposes. 

However, there has been a noticeable shift, with people now preferring partial living and serviced apartments equipped with amenities. This shift in preferences is driven by the desire to not only meet immediate living needs but also to generate income by renting out the property during unused periods. Portugal’s warm climate, offering more than 300 days of sun each year, adds to its appeal as an attractive destination for such multifunctional living arrangements.

Furthermore, property hotspots like the Algarve are experiencing a booming market, attracting high prices fueled by an influx of global citizens. This influx is reshaping the traditional British-led second home and retirement profile of the region. The demand from international buyers is contributing to elevated prices in these sought-after locations.

In summary, the combination of an impressive upward pricing trajectory, increased demand outstripping supply, evolving consumer preferences, and flourishing property hotspots, especially in the Algarve, firmly establishes Portugal as a seller’s market in real estate. Sellers are currently in a favourable position to capitalize on these market dynamics, making it an opportune time for those considering real estate transactions in Portugal.

Why you should entrust your real estate investment to us?

Local Expertise

We know Portugal. Due to our extensive local knowledge, we believe that concentrating our services in a single country destination is the best way to give you the most thorough and useful information. 

Holistic Approach

We offer a streamlined communication channel for the entire process, delivering a comprehensive service that encompasses all facets of your real estate investment journey, including property search, negotiation, legal matters, due diligence, and property management.

Independent Service

As an independent buying agent, we have the flexibility to collaborate with any agent, seller, promoter, or developer, providing you access to all available options in the real estate market. This enables us to objectively analyze every opportunity and find the right property for you at the best price, free from complications.

Simple Process

Technology plays a significant role in our company, allowing us to provide you with detailed property market information and minimize our clients’ involvement in paperwork. As customers ourselves, we understand how to best serve your needs.

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