The initiation of the ECB’s monetary policy normalisation process has led to an acceleration in house prices, especially in markets with a significant mismatch between insufficient supply and dynamic demand. The economies in which real prices have increased the most in the last year and a half, and where the residential markets are showing signs of more significant overvaluation, include Portugal, Bulgaria, Hungary, the Netherlands and Estonia. In contrast, the markets of large economies such as Germany, Sweden, France and Luxembourg remain overvalued, but have corrected the strong price growth they experienced in the decades leading up to the pandemic, reducing signs of overheating.
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The health situation and the lockdowns made 2020 an annus horribilis for Portugal's tourism sector: total profits generated by tourist accommodation establishments fell by almost 3 billion euros and the total number of guests fell by 61%.
Particularly noteworthy was the strong performance of the consumption indicators, especially car sales and air traffic, suggesting that tourism remains a major driver of economic activity. Moreover, the confidence indicators are showing a positive trend across all sectors, with the exception of construction.
GDP performed better than expected in Q1 2023, rallying 1.6% quarter-on-quarter and 2.5% year-on-year thanks to the buoyancy of the foreign sector, especially tourism.
Preliminary GDP data published by the National Statistics Institute indicate a notable acceleration in growth in the final quarter of 2023, with an increase of 0.8% quarter-on-quarter and 2.2% year-on-year in Q4.
The Greater Lisbon region accounted for 18% of all home sales in Portugal in 2023. Of these, 23% involved buyers with tax residence outside Portugal and the EU.