What will the real estate market look like in 2025?
The real estate market in 2025 is proving resilient, with house prices and rents remaining high. Urban areas such as Lisbon and Porto continue to experience strong demand, despite a shortage of affordable housing.
However, some government measures and local initiatives aim to mitigate this situation, including increased public housing construction and tax incentives for renovations. The “Construir Portugal” program continues to play a crucial role in increasing the supply of affordable housing.
Accordingto experts, the market is being impacted by several factors:
- High interest rates: these increase financing costs, making it difficult for many to buy a home;
- High demand in large urban centers: limited supply in these locations is not keeping pace with growing demand;
- Foreign investment: continues to be a driver of pressure on prices, especially in premium areas.
When will house prices fall?
If you expect house prices to fall significantly in 2025, it is important to adjust your expectations. Experts predict that prices will remain high for at least the next few months, especially in urban areas. The fall in prices depends on factors such as:
- Effective implementation of new housing policies: the success of the “Construir Portugal” program and similar initiatives will be decisive;
- Increased supply: public construction projects and incentives for renovation can help balance the market;
- Adjustments in interest rates: a reduction could stimulate the purchase market, but also put pressure on prices to rise even further.
What is “Construir Portugal”?
This government program remains one of the main drivers for increasing housing affordability in Portugal. In 2025, it includes:
- Tax exemptions: IMT and Stamp Duty;
- Implementation of the Public Guarantee for housing loans;
- Construction of new public housing across the country, with a focus on young people and families;
- Rent subsidies for young people in cities such as Lisbon and Porto;
- Tax incentives for owners who place properties on the affordable rental market.
- Despite good intentions, the implementation of these measures faces significant challenges, such as bureaucratic processes and local resistance.
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Source: https://www.comparaja.pt