Caixa Geral de Depósitos (CGD), one of Portugal’s leading banks, has forecasted a continued rise in housing prices for 2025. CGD’s CEO, Paulo Macedo, recently highlighted at the “Encontro Fora da Caixa” conference in Faro that housing demand will remain much higher than the available supply, pushing property prices even further up in the Portuguese market.
Insufficient Supply and Growing Demand: A Formula for Price Escalation
According to Paulo Macedo, the main factor driving housing prices is the insufficient supply of properties to meet the high demand. He noted that Portugal faces a shortage in productive capacity from companies that could otherwise provide affordable housing. This imbalance between supply and demand is expected to keep the market highly competitive, with values continuing to appreciate year over year.
Macroeconomic Outlook for 2025: Economic Growth and Its Impact on Housing
The CGD anticipates economic growth in 2025, with Portugal’s economy expected to expand due to increased consumption and significant implementation of the Recovery and Resilience Plan (PRR). Macedo projects a 3% growth rate, paired with low inflation and a potential reduction in interest rates. These factors could further enhance purchasing power and encourage more investment in real estate.
However, Macedo cautions that this favorable outlook carries some risks. Although the macroeconomic conditions look supportive, economic growth might not reach the desired pace, indirectly affecting housing affordability, especially in a market where supply constraints remain high.
Expectations for Individuals: Increased Investment Capacity and Access to Credit
On the individual level, Macedo expects favorable conditions, including an improvement in debt capacity, increased consumer and housing credit, and greater investment potential. With rising real income, lower taxes, and reduced inflation, families and retirees are likely to have more disposable income, enhancing their access to the real estate market. These conditions could stimulate home purchases despite ongoing price increases.
The Banking Sector in 2025: Record Profits and Narrowing Margins
In the banking sector, Macedo predicts that 2024 will be a year of “record profits,” but margins will narrow in 2025, likely resulting in reduced profits. While this adjustment in margins may impact the sector, CGD remains optimistic, focusing on sustainable investments, especially in strategic areas like the maritime sector, which are expected to generate economic, social, and environmental benefits.
Immo Lusitania: Your Gateway to Luxury Real Estate in Portugal
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As property prices continue to rise, investing in Portuguese real estate now could be a strategic move. Immo Lusitania ensures that clients not only find their dream homes but also make sound investments in one of Europe’s most resilient and rewarding real estate markets.
Conclusion: A Competitive and Resilient Real Estate Market
Paulo Macedo’s insights underline the competitiveness of the Portuguese real estate market, where housing prices are set to increase due to limited supply and robust demand. This scenario calls for effective housing policies and an increase in affordable housing projects to better balance the market and prevent disproportionate price escalation.
For those interested in Portuguese real estate, especially luxury properties, these predictions suggest that now may be an opportune time to invest. With CGD’s optimistic economic outlook and Immo Lusitania’s expertise in the luxury market, buyers can look forward to finding exclusive opportunities in a vibrant, growing market.
Immo Lusitania remains committed to guiding clients through Portugal’s exceptional real estate landscape, turning dreams of coastal living into reality.
