Property prices in Portugal rose by 6.2% during 2020, sharply down from the previous year’s 11.2% growth. On a quarterly basis, house prices increased 2.82% in Q4 2020. All regions of Portugal experienced significant house price falls during the last decade. And despite some recovery in 2009, house prices started to fall again in the last quarter of 2010. Prices only began to recover in Q4 2014, after 13 consecutive quarters of y-o-y house price declines. Residential construction growth weakened last year, mainly due to the COVID-19 pandemic. During 2020, the number of licensed dwelling permits in Portugal rose by 2.6% to 24,663 units, a sharp slowdown from annual growth of 18.4% in 2019 and 43.5% in 2018.
Portuguese economy slumped by 7.6% in 2020 – its worst contraction since 1936, as the pandemic drove an unprecedented decline in tourism revenues. This was also worse than the euro area’s 6.8% economic contraction. Earlier, the government projected an economic bounce- back this year with 5.4% growth. However, this now seems optimistic, as infections continue to rise. The government imposed a night-time curfew and partial weekend lockdown in November 2020 and tightened restrictions further in January 2021.