Portuguese Housing Purchase Intentions Reach 20-Year High, INE Reports
Consumer intentions to buy or build a home in Portugal within the next 12 months surged in September to the highest level recorded since April 2005. This standout finding was part of the latest Business and Consumer Surveys released on Monday by the National Statistics Institute (INE), which also showed the overall economic climate indicator reaching its highest point since February 2022.
The data indicates a significant rebound in housing market sentiment from the consumer side, following a dip in the previous month. This surge in purchase intent is a strong positive signal for the real estate sector, suggesting a deep well of underlying demand despite recent economic uncertainties. The overall economic climate indicator rose to 3.0 in September, continuing an upward trend that began in April.
The INE's report specified that the general consumer confidence indicator saw a slight increase, buoyed by more optimistic views on the past and future financial situations of households. However, the picture is mixed across different sectors of the economy. While confidence indicators rose in trade and industry, they fell in services and, notably, in construction and public works.
The decline in the construction sector's confidence indicator is a point of concern. The INE report states this was due to negative contributions from both "assessments on the order book and employment prospects." This creates a potential paradox for the property market: while consumers are expressing a stronger desire to buy homes than at any point in nearly two decades, the sector responsible for building them is showing signs of pessimism.
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This divergence could have several implications. It may signal that while demand is robust, construction firms are facing headwinds such as high material costs, labor shortages, or financing difficulties, which temper their outlook. If supply-side confidence does not align with this resurgent consumer demand, it could exacerbate the existing housing shortage and put further upward pressure on property prices.
The manufacturing industry's confidence has been rising since February, with positive future production outlooks. In contrast, the services sector saw all its confidence components contribute negatively, including order books and demand perspectives. The trade sector's confidence, however, improved for the third consecutive month.
For the real estate market, the headline is the remarkable strength in consumer purchase intentions. This indicator suggests that potential buyers are looking past recent inflation and interest rate hikes, and are planning to enter the market. This robust demand could underpin property values and drive activity in the year ahead, making the construction sector's response a critical factor to watch. Stay informed on Lisbon property market developments at realestate-lisbon.com.