Solid demand and falling supply is helping the recovery of the residential property market in Portugal and price rises have been seen across all regions, according to the August 2015 RICS/Ci Portuguese Housing Market Survey.

However, new sales instructions have fallen at a time when demand is growing and there has been a modest upturn in rental values. The report shows the imbalance between rising buyer enquiries and falling new sales listings continues to underpin the steady increase in house prices. Likewise, in the lettings market, solid tenant demand growth has pushed rents up marginally.

Overall, respondents to the survey remain confident that prices will rise further over the next quarter and the next 12 months. Indeed, over the year ahead, contributors forecast national prices will increase by around 3% and on average by roughly 5% per annum over the next five years.

In the lettings market, tenant demand increased sharply alongside a steep fall in new landlord instructions. Consequently, rents inched up again following last month’s marginal increase. Notwithstanding this, rents are expected to hold broadly stable in the near term, although expectations for future lettings market activity strengthened notably.