08 February 2021
Does it seem sensationalist? It’s not. These are the median values per square metre of the entire universe of property sales in recent years, in Lisbon and Oporto city centres as well as their metropolitan areas.
But let's start by ...
THE 7 MOST POPULOUS CITIES IN PORTUGAL
Please note the caption on the right of the chart. You will find the corresponding match for each of the colors. But you will also find the value that reflects the evolution of median values / sq. m between the 1st quarter of 2016 and the 3rd quarter of 2020, in Portugal and in each of the 7 cities under review.
The first conclusion is the most obvious one: house values in Oporto and Lisbon have skyrocketed in recent years. Which seems to have had a ripple effect on the neighbouring cities of Vila Nova de Gaia and Amadora. In the latter case, house values increased 95% in four and a half years. Yes, 95%. If the price rise has driven some residents away from the capital, factors such as proximity and the rail and metropolitan connections to Lisbon city centre seem to have been decisive for this price evolution in Amadora.
Now notice how Oporto and Coimbra’s values were practically the same until the 2nd quarter of 2017. And how three years later, the value per sq. m in Oporto is almost 50% higher than in Coimbra. The oldest university in the country and Coimbra-B train station (the one with a direct connection to Lisbon and Oporto) did not keep up with the media exposure gained by Oporto. Boosted by a competitive airport, a supersonic demand from tourists and companies, a flood of Erasmus students and a Business School featured in the international top-rankings...
LISBON METROPOLITAN AREA
This table (the coloured values represent price drops and the ones in bold register peaks during the period in question) shows that house prices in the Lisbon Metropolitan Area (LMA) have risen steadily since 2018. The municipalities of Amadora (please note that, contrary to what happens with Lisbon, Amadora city does not represent the entire municipality), Sintra, Setúbal, Barreiro, Almada and Moita, registered increases over 40%.
On the other hand, in Lisbon and Cascais, the country’s two most expensive municipalities, prices seem to be stagnating or even decreasing. A trend headed by Alcochete.
In any case, it should be noted that, except for the municipalities of Lisbon and Alcochete, prices registered in the 3rd quarter of 2020 for the remaining 16 LMA municipalities represent historical records.
LISBON CITY CENTRE
The table referring to the parishes of Lisbon city clearly shows that, since 2019, there isn’t a single parish where the median values per sq. m of property sales accumulate consecutive rises. The values in red show the price drops compared to the previous quarter. This happened in 13 of the 24 parishes of the capital during the 3rd quarter of last year.
I would like to draw your attention to Santa Maria Maior parish which, despite having been one of the areas most affected by the restrictions for Local Accommodation (which foresaw a negative review of the potential for return on investment), registered a more than 50% increase in two and a half years. That said, we cannot forget the role that urban rehabilitation has played in the historical centre of Lisbon.
And no, I'm not forgetting Marvila. That value is a kind of statistical aberration for which there is a reason: the Prata Riverside Village. Without underestimating the impacts that this development may have on the entire Marvillian ecosystem, that value is justified by sales of around 6,000 € / sq. m (apartments sold for half a million, 1 million and 1 and a half million euros), in the parish that recorded the lowest transaction rates of the entire city, and few sales.
In other words, we cannot say that house values in Marvila increased 87.9% in 2018. It was the profile of that parish's housing stock that underwent changes, through the introduction of a product that contrasts with the remaining available offer. The size of the project in question will almost certainly have an impact on the local community and end up valuing the perception that most of us have about "being" or "living" in Marvila. And only then may we confirm a substantial rise in the price of land of that parish.
OPORTO METROPOLITAN AREA
I am not familiar with the dynamics of the metropolitan area in the north of the country, but I know the city of Porto quite well. It’s easy to understand that the impacts beyond the city limits shall be very similar to what we observed in the outskirts of Lisbon.
When we look at this table, we note something that we had already seen in the LMA: the median house values / sq. m reached historical peaks in 13 of the 17 parishes. And it is no coincidence that the 4 municipalities that border Porto (Matosinhos and Maia to the North, Gondomar to the East, and Gaia to the South) were also - together with Valongo - those which followed more closely the evolution of house prices in the northern capital.
OPORTO CITY CENTRE
The parishes with higher values / sq. m are: União de Freguesias (UF) of Aldoar Foz do Douro and Nevogilde (which, as the name suggests, includes the famous Foz area), UF of Lordelo and Massarelos (that hosts Bairro Gomes da Costa, Serralves, Campo Alegre, Bom Sucesso, Galicia, and most of the riverside area between Foz and Miragaia), and Cedofeita UF, Santo Ildefonso, Sé, Miragaia, São Nicolau and Vitória (where the historic city centre is located).
In order to understand the pressure that urban rehabilitation exerts on the historic centre: according to Idealista web site (on February 7, 2021), 656 of a total of 1056 buildings for sale in the city of Porto are located in that last UF. Moreover, it is estimated that residential pressure in Porto has started to exert itself with at least a one-year delay in relation to Lisbon. This may justify the upward trend of prices that is still prevailing in the country's second city.
Finally, I would like to draw your attention to Campanhã and Bonfim, the parishes in Porto where the evolution of price / sq. m was more significant. These are market dynamics that a citizen of Porto will surely be able to explain better. But having walked so many kilometers from Campanhã Station to other parts of the city, it would be easy to predict that, as prices in areas with more infrastructures and services skyrocketed, the interest in those areas would grow. Afterall ... how many decaying alleys in Lisbon and Porto haven’t we seen being transformed into “the places to be”?
Technical note (written by Statistics Portugal)
Statistics on house prices at local level are released quarterly and have national coverage. The observed statistical unit is the family dwelling, and the target population is the family dwelling transactions by sales in national territory.
Statistics on house prices at local level are based on the use of administrative procedures, namely from anonymised administrative tax data provided by the Portuguese Tax and Customs Authority (AT), under an agreement signed with Statistics Portugal, on the Municipal Property Transfer Tax (IMT) and the Municipal Property Tax (IMI).
The calculation of Statistics on house prices at local level is based on the linking between the Municipal Property Transfer Tax information (from where the transaction prices are obtained) and the Municipal Property Tax information (from where identifying characteristics of the transacted dwelling are obtained). The link between these two administrative tax sources is made using the "generated article" variable.
The information on transactions sale value of family dwellings includes the Municipal Property Transfer Tax paid statement referring to "acquisition of property rights". Only transactions where the Municipal Property Transfer Tax destination code is "House" and the allocation of its information from the Municipal Property Tax that is defined as "House" are used.