Inflation and rising interest rates block the access of Portuguese families to the purchase of a house, but this does not lead the Bank of Portugal to believe that a price “correction” may be imminent. The interest on the part of foreign – which the supervisor admits could increase further – the investment in real estate as a hedge against inflation and rising construction costs should do the marketstay attractive“. In other words, prices can continue to rise; the Bank of Portugal simply does not want this to happen due to the increase in bank credit, otherwise one of several risks the supervisor sees for financial stability (which also include further decreases in bagsthe risks associated with crypto assets and still the moratoria).
Since June 2018, the Bank of Portugal has warned of “signs of overvaluation” in house prices, but in recent years prices have continued to rise in double digits. And, although at this time it is possible to foresee “a reduction in demand” by Portuguese families, the supervisor’s expectation is that, in general, soon the prices won’t go down.
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Source: Observadora
