Bank Property Valuations Rise in January 2025

In January 2025, banks carried out approximately 35,270 property valuations, representing a 5.1% decrease compared to the previous month, but a significant year-on-year increase of 22.1%. The median bank valuation for housing was €1,774 per square metre, showing an increase of €27 from December 2024. The annual variation reached 14.5%, higher than the 13.7% observed at the end of the previous year.

Data released by the National Statistics Institute (INE) show that this value marks a new historical high, in the context of recent incentives for young people to purchase homes. These incentives include exemptions from the Municipal Property Transfer Tax (IMT), stamp duty, and fees, as well as the possibility of 100% financing through a public guarantee for buyers up to 35 years of age.

The regions with the highest increases compared to December 2024 were the Centre, the Setúbal Peninsula, and Alentejo, with a growth of 1.8%. The only decline occurred in the Autonomous Region of the Azores, where bank valuations dropped by 1.4%. When comparing to January of the previous year, a general increase was observed, with the Setúbal Peninsula leading the growth (14.6%).

In the apartment segment, the median bank valuation was €1,993 per square metre, reflecting a 15.5% increase compared to January 2024. The regions with the highest values were Greater Lisbon (€2,641) and the Algarve (€2,293), while Alentejo had the lowest value (€1,248). The largest year-on-year growth occurred in the Autonomous Region of the Azores, with a rise of 19.3%.

For houses, the median value reached €1,326 per square metre, showing an 8.5% increase from December. Greater Lisbon (€2,445) and the Algarve (€2,376) remained the areas with the highest values, while the Centre and Alentejo had the lowest valuations (€1,029 and €1,064, respectively). The Autonomous Region of Madeira stood out with the most significant year-on-year growth (11.7%).

The INE further highlights that, for the calculation of the median bank valuation, 22,702 apartment valuations and 12,568 house valuations were considered. Although there was a reduction of 1,901 valuations compared to the previous month, the year-on-year comparison demonstrates a strong growth trend in the sector.

The evolution of bank property valuations reflects the dynamics of the real estate market, driven by factors such as limited supply, increased demand, and new public support. The real estate sector remains one of the most dynamic in the economy, influenced not only by the economic context but also by monetary policy and the availability of credit.

Price stability will depend on several factors, including the ability to build new homes to balance supply with growing demand. The forecast for the coming months suggests that this growth trend will continue, potentially influenced by changes in interest rates and financing availability.

With sustained property value growth, buyers face increased challenges when acquiring homes, while banks adjust their valuations to ensure greater security in real estate financing. The sector will remain under close scrutiny, particularly in light of economic changes and future housing policies.

Source: SUPERCASA