THE REAL ESTATE MARKET IN JUNE
- New Mortgage Lending Up 24.2%…
Housing permits rose by 20.6%, while residential bank valuations were up by 8.0% in the year to May. At the same time, cement consumption in Portugal rose by 11.5% y-o-y, according to AICCOPN’s Statistical Synthesis of Housing.
During the first five months of 2021, licences issued by city councils for the construction or rehabilitation of residential buildings rose by 20.6%.
The rise stemmed from a 22.6% increase in new housing, 19.1% for new builds, and 13.2% for residential rehabilitation works.
According to AICCOPN, the changes in licensing are partially due to the reduction in licensing that occurred in March and April 2020 due to the pandemic outbreak and the first containment measures.
In the first five months of 2021, new loans for housing purchases rose significantly to 4.569 billion euros, increasing 24.2% y-o-y. In April, residential bank assessments reached a new high, up 8.0% year-on-year. Flats rose by 8.6% and houses by 6.5% year-on-year.
The Statistical Housing Survey highlighted the Metropolitan Area of Porto, where the number of newly licensed homes totalled 5,360 in the twelve months ending May 2021, increasing 11.6% compared to the 4,805 housing units licensed in the previous twelve months. According to the analysis, 22.1% were one-bedroom flats or studios, 28.2% were two-bedroom units, and 49.6% were three-bedroom units or more.
- Interest Rate on Mortgages Down to 0.826% In…
According to data presented by the National Institute of Statistics, the implicit interest rate for mortgage contracts in June stood at 0.826% (vs 0.841% in the previous month).
For contracts signed in the last three months, the interest rate fell from 0.705% in May to 0.655% in June. The average capital in debt increased 244 euros in the month under review, settling at 55,915 euros. The average instalment rose 3 euros, to 231 euros.
The implicit interest rate on mortgage loans fell to 0.826%, 1.5 basis points down from the previous month. Regarding contracts signed in the last three months, the interest rate was 0.655% (vs 0.705% during the last period).
For the most relevant category of mortgage loans, for acquiring a home, the overall implicit interest rate decreased to 0.844% (-1.4 b.p. in comparison to May). For contracts signed in the last three months, the interest rate stood at 0.652%.
Regarding monthly instalments, the average payment rose by three euros, to 231 euros. Of this amount, 38 euros (16%) correspond to interest and 193 euros (84%) to amortized capital. In contracts signed in the last three months, the average value of the instalment fell 22 euros to 276 euros.
In June, the average principal outstanding for all contracts rose by 244 euros compared to the previous month, to stand at 55,915 euros. For contracts signed in the last three months, the average outstanding principal was 114,752 euros, 926 euros more than in March.
- Investment Raised Through Golden Visa Programme Up to €51.2 Million in May…
Last month, the Portuguese government issued 98 golden visas, of which 90 stemmed from real estate purchases. According to the SEF- Foreigners and Borders Service, the total investment raised rose by 82.8% y-o-y in April to 51.2 million euros.
According to an article in ECO in May of last year, the total raised hit just 28 million euros. Compared to April, investment resulting from the Residence Permit for Investment programme grew by 39.5 per cent to 36.7 million euros.
The Portuguese government issued 98 golden visas in May, 90 of which stemmed from purchases of real estate (22 for urban renewal), seven from capital transfers and one for job creation, according to t”SEF (Foreigners and Borders Service).
In May, the purchase of real estate totalled 48.1 million euros, of which eight million euros were for urban renewal, while capital transfers accounted for 3.1 million euros.
Thirty-five gold visas were granted to residents of China, 12 to Brazil, 9 to the United States, 6 to India and 5 to Russia. A total of 326 golden visas were granted in the first five months of the year, including 45 in January, 52 in February, 58 in March and 73 in April. The investment raised between January and May totalled 173.4 million euros, 17% more than in the same period of 2020.
The programme for granting Residence Permits for Investment, launched in October 2012, raised until last June, in cumulative terms, an investment of €5,812,432,281.33.
Since the creation of this instrument, 9,715 Investment Residence Permits have been granted: two in 2012, 494 in 2013, 1,526 in 2014, 766 in 2015, 1,414 in 2016, 1,351 in 2017, 1,409 in 2018, 1,245 in 2019, 1,182 in 2020 and 326 in 2021. Until last June, 9,124 visas were granted through the purchase of real estate, of which 848 with a view to urban rehabilitation.
- June Brings Continued Growth in Tourism, however tourism receipts are still a long way from where they were in 2019.
The tourist accommodation sector hosted one million guests for 2.1 million overnight stays in June 2021. During the same month last year, when tourism had been brought to a virtual standstill due to the pandemic, there were 126,600 guests for a total of 261,600 overnight stays
However, the uptick in tourism this June still leaves a lot of room for improvement. According to the National Institute of Statistics (INE), compared to June of 2019, the number of guests and overnight stays fell by 62.3% and 68.6%, respectively.
There were decreases of 22.3% in resident overnight stays and 83.8% in non-resident overnight stays (vs May 2019). During the first five months of the year, total overnight stays fell by 48.8%, as visits by residents dropped 3.6%, while those by non-residents were down 72.7% (y-o-y) as the effects of the pandemic only appeared towards the end of February.
Compared to the same period in 2019, overnight stays dropped 79.7% (-53.3% for residents and -90.1% for non-residents). In May, 35.7% of tourist accommodation establishments were closed or hosted no guests (50.4% in April).
In June 2021, the tourist accommodation sector hosted one million guests for 2.1 million overnight stays, up 681.3% and 687.7% y-o-y, respectively (vs +860.9% and +599.8% in May). Total guests fell by 62.3%, while overnight stays dropped 68.6%. Overnight stays in hotels (78.4% of the total) increased by 808.6% (-70.4% compared to June 2019). Stays in local accommodation establishments (15.4% of the total) grew by 386.5% (-66.5% compared to the same month of 2019), while those in rural and residential tourism (6.2% share) rose by 586.8% (-21.1% compared to June 2019).
Between January and June this year there was a 48.8% decrease in total overnight stays, stemming from drops of 3.6% in resident stays and 72.7% in non-resident overnights. Compared to the same period in 2019, overnight stays declined by 79.7% (-53.3% for residents and -90.1% for non-residents). Between January and May 2020, nights spent by residents accounted for 65.1% of the total, vs 34.6% in 2020 and 28.3% in 2019.
Sources: INE / AICCOPN / ECO / SEF
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