A significant proportion of the new apartments whose license applications have been filed with the local authorities in the last five years have not yet had their license approved and have not started construction, concludes Confidencial Imobiliário.
Between 2019 and 2023, license applications for 128,800 new apartments were filed with the municipalities (mainland Portugal), of which only 59% (more than 75,550 dwellings) were actually licensed and entered into construction. About 41% of the potential supply, totaling 53,200 apartments, is on hold.
This portfolio of unrealized housing supply is similar to the large number of apartments completed in the same period, which were fully absorbed by existing demand. According to Confidencial Imobiliária's analysis of the data from the certificates issued by ADENE, which reflect the investment intentions of real estate development, in addition to the real estate licensing data from INE - National Statistics Institute, between 2019 and 2023 48.900 new apartments will have been completed and it is estimated that all of them will have been sold, according to projections of transactions made using the SIR-Sistema Residencial database. This means that, in the last five years, it would have been possible to double the country's new residential supply.
Ricardo Guimarães, director of Confidencial Imobiliário, comments in a statement that «these data show that there is a very significant gap between investment intentions and the work actually launched. What's more, this gap has been worsening with each new year, so much so that the ratio between works, which are given to us by the licenses issued, and projects with a request for a license, given by the certificates, has fallen from 74% in 2021 to 53% in 2023.
For the expert, this freezing of such an important slice of the planned supply reflects, above all, the cycle of instability of recent years, marked by a health crisis, war, inflation, rising interest rates and, at national level, the 'Mais Habitação' package, a context which, in practice, meant taking 53,000 new apartments off the market.
This has been a particularly striking situation in the last year, as shown by the Portuguese Investment Property Survey, which Confidencial Imobiliário conducts in partnership with APPII, and whose most recent edition reveals that "instability and political risks were the factors that most aggravated and penalized the increase in supply in 2023. At the same time, the lack of demand appears to be the least of the sector's concerns".