Housing. Prices are increasing but without significant overvaluation

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In real terms, home prices in Portugal increased by 7.9% in 2017, the International Monetary Fund said in its analysis released on Thursday.

IMF staff explain that after a decline of 18% in real terms on housing prices between 2010 and 2013, there has been an increase since then of around 20%, especially in Lisbon, Porto and the Algarve region.

While the increases were mainly driven by housing transactions involving non-resident citizens, the share of housing transactions financed by banks in Portugal has been increasing since 2015 (reaching 41% of the total in the last quarter of 2017), IMF officials also note.