The former CEO of Novo Banco has commented on the robustness of Portugal's property market, emphasizing the absence of a "real estate bubble."
António Ramalho, speaking at the Portugal Real Estate Summit, emphasized that the continuous increase in house prices in Portugal should not be interpreted as a sign of a real estate bubble. He highlighted the scarcity of available housing and the resilience of the job market as crucial factors supporting this view.
Ramalho noted that while house price growth is moderating due to adverse base effects and tighter financial conditions, the demand for housing remains strong, although actual transactions may be decreasing. He emphasized that despite contrary opinions, Portugal does not currently have a real estate bubble and is unlikely to experience one in the future.
Several factors underpin his perspective. Firstly, Portugal's job market is stable and robust, unlike the situation during the 2008 housing crisis when there were more construction projects than buyers. Additionally, the demand for housing in Portugal, driven by both domestic and foreign buyers and high tourist activity, has been a key driver of recent house price growth.
Pedro Siza Vieira, the former Minister of Economy and Digital Transition, echoed the sentiment that Portugal is not at risk of a real estate bubble. He emphasized the maturity of the Portuguese market, where a substantial portion of the population owns their homes, with nearly two million families having paid off a significant portion of their mortgages.
He also pointed out that Portugal, in contrast to some other peripheral destinations, remains a low-risk real estate market due to its local significance. While he didn't claim Portugal to be the best real estate market globally, he highlighted it as one of the finest options in the world.
Comments