Portugal's house prices set to rise by 8% per year

House prices in Portugal are expected to increase at a rate of over 8% per year over the next 10 years, according to a study conducted by the IFO Institute at the University of Munich in Germany, which highlighted the forecasts of more than a thousand economists about the future of the global housing market.

Forecasts from a German institute come at a time when house prices in Portugal, in the first quarter of this year, began to slow down. In Southern Europe, where the average house prices are expected to evolve between 10 and 15% per year, the value is expected to be inflated mainly by countries like Malta, Serbia, and Albania.

These data are part of the Economic Experts Survey, a quarterly global survey conducted among economics experts, and its latest edition was published this Wednesday. They come at a time when house prices decelerated to 8.7% in the first quarter of 2023, marking the lowest year-on-year increase since the second quarter of 2021, as reported by the Institute of National statistics’s (INE) Housing Price Index.

Portugal, which is expected to see an annual increase of 8.2% in housing prices over the next ten years, according to the authors of this study speaking to CNN Portugal, is analyzed globally alongside other Southern European countries. Overall, the surveyed economists believe that in this region, the selling price of houses could rise between 10 and 15% in the next decade.

The findings of the quarterly Gobal Economic Experts Survey arrive as house price growth slowed to 8.7% in Q1 2023.

However, this average, "quite high" for Southern Europe, is mainly supported "by the expectations that economists have for Malta, Serbia, and Albania," says Timo Wochner, a researcher at the IFO Institute.

The research highlights substantial increases in property values worldwide, with regions such as East Africa and South Asia forecasted to experience increases of over 20% per year. "South America, Eastern Europe, Central Asia, and North Africa forecast growth of 10 to 15% per year, while North America, Western Europe, Oceania, and Southeast Asia forecast modest increases of 6 to 8%," the same study states.

The research carried out by the institute gives Portugal a negative rating regarding the country's political and economic state, which is in line with most Southern European countries. "Experts are particularly pessimistic in North Macedonia and Bosnia and Herzegovina, but the assessment is also negative in Southern European countries like Italy, Spain, and Portugal," the study states, highlighting an exception - "Greece is a significant outlier in this analysis, having recorded one of the highest positive variations among all countries in the world."

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