The evolution of housing prices since the beginning of 2018 in Lisbon and its metropolitan area

MUNICIPALITIES IN THE
LISBON METROPOLITAN AREA

Q1 2018 – Q4 2019

Q1 2020 – Q4 2021

Q1 2022 – Q4 2022

Tables 1.1, 1.2 and 1.3 [values in red represent price drops compared to the previous quarter, and the ones in bold register peaks in that municipality during the period in question] show that the value of housing in the Lisbon Metropolitan Area (LMA) has risen consistently. To the point of verifying that in 17 of the 18 municipalities in the LMA, historical peaks were registered in the 4^th quarter of 2022 (the exception was Alcochete).

But... it is equally clear that despite the consistent appreciation of housing prices in the LMA, the rate at which it is happening has been slowing. There are only 7 municipalities (out of 18 in total) where the appreciation between Q1 2020 and Q4 2021 was higher than the appreciation between Q1 2018 and Q4 2019. They are Alcochete, Mafra, Sesimbra, Seixal, Vila Franca de Xira, Palmela and Moita.

As we analyze the Pordata' data, the answer seems to be clear: during 2020 and 2021 the most significant land appreciation happened in municipalities with lower population densities. Alcochete and Palmela have less than 150 inhabitants per sq. km. Sesimbra 268, Mafra 300, and Vila Franca 432. Here are some terms of comparison: Odivelas and Lisbon are around 5,500 inhabitants per sq. km, and Amadora is over 7,000.

During the pandemic, prices increased more in the less dense areas of the LMA. In Peri-urban areas. Usually characterized by a more scattered population, and even by some similarities to rural areas. Which is in line with the common sense triggered in the face of the effects of Covid-19: more than ever, people have shown a willingness to exchange centrality for space.

Finally, the most significant evolutions between the first and the fourth quarter of 2022 took place in Moita and Barreiro, where housing prices rose by 18.7% and 17.5%. It should be noted that the characteristics of these municipalities no longer fit the dynamics mentioned in the previous paragraphs.

LISBON CITY PARISHES

Q1 2018 – Q4 2019

Q1 2020 – Q4 2021

Q1 2022 – Q4 2022

When looking at Tables 1.1, 1.2, and 1.3 [values in red represent price drops compared to the previous quarter, and the ones in bold register peaks in that municipality during the period in question], one can see that it cannot be said that in 2020 and 2021, Lisbon will have experienced a transversal and sustained appreciation (even though, in the city as a whole, housing prices rose 5.9% in this period). What is most important to underline is that contrary to current discourse, the capital city is not a homogeneous territory. The 24 parishes and 100 sq m represent a territory full of heterogeneity with distinct dynamics.

And if the decreases in value in 2020 and 2021 (the years most affected by the pandemic) in Misericórdia and Santa Maria Maior are easily related to the difficulty in monetizing properties used for tourism purposes, I cannot help but share that, in these parishes, the current weight of dwellings dedicated to short-term accommodation corresponds, respectively, to 47.4% and 71.3% of the number of homes used for their conventional purpose. These are figures that I don't see anyone discussing and about which it occurs to me to say two things:

That short-term accommodation as a whole cannot be assessed and judged in the light of the reality of two parishes (which is the only thing I could say after, in the previous paragraph, drawing attention to the heterogeneity of the capital);

That it is incredible how such numbers were allowed and that, even ignoring the brutal impact of having the center of Lisbon partially obliterated of an identity and life of its own, one cannot perceive that – businesswise – the decharacterization of the city center will make it less appealing in the medium term, namely in the eyes of those who are more willing to consume and invest.

I don't want to spend too much time talking about Marvila, but I can't ignore these figures. I invite readers to read what I wrote in June 2022. At the same time I copy a paragraph that I originally published in January 2020:

Prata Riverside ends up influencing the value of that parish's soil in two ways. Through the transactions that are taking place there, at values​/m2 well above the local average. And through the impact that a prime, newsworthy real estate project - with the signature of Renzo Piano (author of the Georges Pompidou Center and winner of the Pritzker Prize), and the ambition to revolutionize that area of ​​the city - generates in the perception of the value/m2 of a parish that, until a few years ago, some of Lisbon´s citizens would have difficulty locating on the map.

Note that between the first and the fourth quarter of 2022, besides Marvila, São Vicente Ajuda and Campo e Ourique reached valuations higher than 15%.