In an international context marked by geopolitical tensions in Ukraine and the Middle East, uncertainty over the duration of the European Central Bank’s tightening of monetary policy and a deterioration in the economic outlook, ‘the likelihood of a price correction in the (Portuguese) residential property market is likely to increase”, warns the Bank of Portugal (BdP). 

In its analysis of the main vulnerabilities to financial stability in Portugal, the Portuguese regulator pointed to the risk of ‘a price correction in the residential property market, boosted by the uncertain macroeconomic scenario’, marked by rising interest rates and geographic instability.

The Financial Stability Report for November 2023, published in December, states that cooling demand for housing is already clearly visible in the country, adding that house sales are falling with the number of transactions down 22% in the first half of 2023 compared to the first half of 2022. Mortgage lending in January to September this year was also down, -20% compared to the same period in 2022.