The past year kept property professionals and lawmakers on their toes. A wave of fresh incentives, new tax advantages for foreign residents, exemptions designed for young people, significant investment from Portuguese nationals, the ever-present challenge of limited property availability, and a thriving luxury property sector all played a part.
So, what was truly memorable about the real estate scene in 2024? Essentially: the Algarve and Portugal remain highly desirable, and property values reflect that popularity. Let’s delve into the data:
During the summer of 2024, residential property transactions saw a robust increase of 19.4% compared to the same period the year before. According to the latest figures released by the National Statistics Institute (INE), This resulted in selling 40,909 residences!
This intensified activity pushed average home prices to their highest annual growth rate in the last two years, with the housing price index surging by 9.8% year-over-year! Pre-owned properties led the charge, with values increasing by 10.5%, eclipsing the 8.1% rise seen in new constructions.
Existing homes accounted for roughly 79% of all transactions, representing €6.5 billion of the total transaction value of €9.1 billion – a remarkable 30.7% increase from the prior year.
Domestic buyers were the driving force behind this surge, accounting for a significant 93.5% of all purchases. Portuguese residents acquired approximately 38,254 residences, marking a substantial 21.4% rise compared to the same timeframe in 2023.
Conversely, sales to international buyers experienced a slight decrease, with buyers from outside the EU acquiring 8.1% fewer properties. This transition may be attributed to the termination of initiatives like the Golden Visa and the Non-Habitual Residency tax scheme.
While foreign investors had a smaller impact, the overall market growth underscores the robust demand coming from Portuguese nationals and the success of recent policy adjustments in encouraging residential property purchases.
Given projections indicating that prices are expected to continue their upward trend for at least the next couple of years, consulting an expert can be invaluable. Whether you wish to capitalize on tax incentives or identify suitable property investments, reach out to experienced real estate professionals at Algarve Home Sales.
