Residential Bank Valuations Rise to Historic High Again in October Even as Banks Maintain Conservative Stance

1 December 2020Data published by Portugal’s National Institute of Statistics (INE) have demonstrated that average residential bank valuations conducted over the past year have been lower than the eventual sales price, particularly when located in more expensive areas. Nevertheless, those valuations reached 1,131 euros per square metre in October, a new high. The year-on-year increase reached 2.9%, according to figures in a month in which banks performed some 25,000 bank valuations.

Banks are increasing the amount they allocate to mortgage lending once again, after holding steady in September. The current cost per square metre represents an increase of 0.27% (three euros) over the previous month. The rise, however, is solely due to a rise in the price of flats, where the median value increased by six euros to 1,239 euros per square metre in October.

Despite all this data, the country’s banks have maintained a conservative stance when assessing the potential worth of homes. The trend, which initially began in the capital and more expensive areas of the country, is now spreading to other regions.

The banks are attempting to avoid excessive indebtedness at a time when the housing market is on the rise, thus preventing families from taking on loans that they may be unable to repay.

Original Story: Economia OnlineRita Neto

Translation/Summary: Richard Turner