The latest data published by Portugal’s National Institute of Statistics (INE) shows that although house prices rose 8.7% in Q1, this is a slowdown compared to Q4 2022, which recorded an 11.3% rise.

Indeed, the Q1 increase indicates the least significant year-on-year price rise since Q2 2021.

In addition, the number of sales in Lisbon hit its lowest point since 2016, not taking into account the decline during the pandemic.

The INE said the rise in the Housing Price Index was 2.6 percentage points under the increase from the previous quarter.

Despite the slowdown, the overall change in Portugal’s house prices – 1.3% compared to Q4 2022 – rose from the 1.1% figure registered at the end of last year.

Between January and March this year, just 34,493 homes were sold, a 20.8% decline over the same three months last year, representing a 10.5% reduction. The value of the properties sold totalled €6.9 billion, 15.2% less than Q1 2022, The Portugal News reports.

Around 85% of the houses were purchased by families, representing €5.8 billion. According to the INE, this is the lowest percentage since Q2 2021. Whereas 7.2% of purchases were made by international buyers, tax residents outside Portugal. 

The INE data shows that in the first quarter, “housing purchases by buyers with tax domicile in the National Territory decreased by 21.9% year-on-year, to a total of 32,001 units”, that is, 92.8% of the total number of transactions, “the lowest relative weight in the series starting in the 1st quarter of 2019.”

Furthermore, the majority of houses were sold in the country’s northern region at the start of the year, totalling 9,924. “In the Lisbon Metropolitan Area, 9761 transactions were registered, which, except for the 2nd quarter of 2020, due to the influence of the COVID-19 pandemic, constitutes the lowest number of sales in this region since the 4th quarter of 2016,” the INE stated.

Property prices in Lisbon remain high: “Between January and March 2023, the Lisbon metropolitan area concentrated 40.6% of the total value of housing transactions, followed by the North with 23.5%,” with transaction values ​​at their lowest for the past two years.