Housing prices are expected to increase at 4% in 2020
The overvaluation of house prices in Portugal is not in itself a novelty. In fact, this seems to be a condition to which the Portuguese and the general population increasingly subject themselves without means to mitigate this trend.
Subject to high foreign demand and the general dynamics of tourism, Portuguese housing prices are expected to grow by 4% next year. This was the figure released by the study by the US agency Moody's that predicts a similar scenario for several European countries such as Spain, Ireland or Germany whose housing prices are also expected to rise. Out of this trend are only the United Kingdom and Italy, which appear in the study as the only countries in which house price developments are expected to stagnate.
According to the Bank of Portugal's Financial Stability Report, households continue to show clear signs of market overvaluation in aggregate terms, which is one of the biggest risks to the country's economic and financial stability.
However, not everything is definitive. It is also expected that in the near future price growth will be more subdued due to the slowdown in economic activity, the reduction in demand for properties for local accommodation and the increase in housing supply in Portugal.
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Source: (Sic Notícias, 2019)