by buymeprestige 
Here’s the question that has been making economic and real estate experts dwell on in recent times. What will the effects of inflation be on the price and demand for home ownership? Will prices fall? What are the forecasts for the future?
For many years now we have been living on a veritable rollercoaster ride as far as the Portuguese economy, and consequently the property market, is concerned. After enduring several crises, a new uncertainty is looming over the good times in the property market: rising interest rates, rising prices and the European war.
Contrary to speculation, according to the economic projections (IMF) a peak is still expected in the euro zone by the end of the year, with inflation remaining high, due to all the external factors such as the increase in energy and food retail.
In the luxury real estate and investment market the scenario is different, as differentiated and unique factors are presented in relation to the rest of the world. The demand for luxury real estate will continue to grow and is increasingly becoming a safe bet with guaranteed returns for investors.
The Portuguese government’s expectations, according to the state budget for 2023, are that the inflation rate will still reach 7.4%. If there is a slowdown, it will be more evident in the residential sector, with a reduction in family savings as the cost of living rises.
However, and despite the various speculations, contrary to what happens in the stock market, the real estate sector needs time for the fall in the market to lead to lower sale prices. As such, even though the number of transactions will decrease until these factors influence the value of homes will be quite some time away.
Ultimately, the direction of the housing market depends largely on the length of the rate hike cycle. On the one hand, lower prices would make homes more affordable for first-time buyers from a purchase price perspective, but the ability to pay the mortgage may be equally difficult due to rising interest rates.
BUYME’s Prestige and financial advisers are always up to date on economic changes and prepared to act in either situation, assuring you that your interests will always be secured and your investments safe. When it is time to buy a house, choose the best, choose BUYME.