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Is a real estate bubble coming?

The issue of the real estate bubble has been a concern for citizens in our country. With high house prices and the difficulty in acquiring property, whether for purchase or rent, citizens are questioning the future of the real estate market.

Is a real estate bubble coming? Let's explore this topic.

What is the housing bubble?

First, it is important to define the concept. The term real estate bubble is used to describe a situation in which property prices suddenly increase excessively, making it unsustainable for citizens to purchase a home.

Property bubbles tend to go in cycles, with the boom phase generally characterized by a rapid increase in property prices – many people buy properties with the intention of selling them later for a higher price. However, the high demand eventually ends, which leads to a decrease in demand and, consequently, a drop in property prices. This price drop could have negative consequences for buyers who purchased properties at high prices.

Real estate bubble in Portugal

Although it is a concern, the housing bubble is not necessarily a reality happening today. In addition to the cost of construction remaining high, the number of residents in Portugal working for non-resident companies has been increasing, with salaries allowing workers to pay the current rent.

The price per square meter in our country also remains low, compared to the price in other countries in Europe, allowing Europeans to acquire properties in Portugal at more affordable prices, investing and benefiting from the investment.

How to avoid the formation of a housing bubble

To prevent the formation of a real estate bubble, some measures can be taken, for example, DECO suggests State intervention through the use of European funds intended for urban rehabilitation.

It also suggests easing the rules related to the renegotiation and restructuring of home loans, helping people deal with financial difficulties.

Natália Nunes from DECO also proposes the creation of a financing line to help families pay the installments on their housing loans.

Read the full article here!

Source: Imovirtual


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