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Portugal is the country with the fifth highest rise in price in EU real estate during the pandemic

Portugal is the country with the fifth highest rise in price in EU real estate during the pandemic

Between April and June this year, homes in Portugal increased by 7.8%, according to recent Eurostat data.

Between April and June 2020, in full restraint because of the pandemic, in most EU Member States, property prices rose by 5% in the Eurozone and 5.2% in the European Union (EU) compared to the same period last year. Portugal recorded the fifth biggest rise in the EU: with the rise of 7.8% in Portuguese real estate

So, what has changed since 2010? The price of houses has risen almost twice as much as their rents, how can it be?

In Portugal the house prices have risen by more than 40% since 2010, and rents have increased by more than 15% in the last decade, according to the data released by Eurostat this week.

Since 2010 and until the end of the first half of 2020, housing rents increased by 14.2% while sales prices rose to 25%.

 

House Prices EA 19 and EU 27

Eurostat reported that from 2010 to the second quarter of 2011, house prices and rentals in the European Union (EU) had a smooth and similar rise, however it was from the third quarter of 2011 that the trajectory was no longer similar.

Then follows a significant increase in early 2015, and since then house prices have been rising at a much higher rate than rents at the same time. Thus, there has been since 2010 and the second quarter of 2020 an increase in rents of 14.2% and housing 25% - this means a difference between the two indicators of 10.8% higher values in the purchase of property.

But it was not only in Portugal that there was this difference, because the truth is that house prices grew more than rents in several Member States, but it was in Portugal where there was greater expression of this phenomenon, which caused house prices to rise by more than 40% and rents more than 15%.

However, we must not forget the fall in prices between 2008 and 2010 from the financial crisis, which are somewhat reflected here and as well reflected in the difference of the house prices later. In 2012 the sale price of real estate was about 20% below the cost price of the property and only in 2014 were again reached values in real estate that reflected the cost of construction and the price of land in the sale of real estate.

Houseprices Eurostat

In terms of sales prices, and in the period analyzed by Eurostat, the highest increases occurred in Estonia (+100.5%), Luxembourg (+ 85.8%), Latvia (+ 77.3%) and Austria (+ 75.9%). The most lost in this period was Greece (-31.0%), Italy (-13.2%), Spain (-5.6%) and Cyprus (-3.0%) which recorded the largest declines.

Houseprices

On the other hand, in rents, and compared to the second quarter of 2020 with 2010, prices increased in 25 EU Member States and decreased in just two, with the largest rental price increases in Estonia (+ 135.8%), Lithuania (+ 105.4%) and Ireland (+ 62.3%). The falls were recorded once again of higher volume in Greece (-25.2%) cyprus (-4.8%).

Source: Eurostat https://ec.europa.eu/eurostat/web/products-eurostat-news/-/DDN-20201007-2?inheritRedirect=true&redirect=%2Feurostat%2Fhome%3F

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