The average selling price of buildings over 500 m² in Lisbon increased by 34% in the 12 months to the end of the second quarter of 2019 to 2,915 euros / m².

Honest Buildings Wealth Advisers _portugal-lisbon.jpg

These figures are now released by Confidencial Imobiliário and concern the territory covered by the SIR Urban Rehabilitation, which covers 17 central parishes of Lisbon.

Campolide is the parish where this type of building is more expensive, with transactions recording an average selling price of 4,246 euros / m², followed by Belém, with a value of 4,071 euros / m². Santo António, Santa Maria Maior and Estrela recorded prices between 3,000 and 3,900 euros / m² in the period analyzed.

The price increase was transversal to almost all parishes, according to Ci, which highlights Alvalade, which reached 2,542 euros / m², and Alcântara, with a value of 2,394 euros / m², compared with less than 1,000 euros / m². to which both parishes traded this type of assets a year earlier.

Santo António, Arroios, Avenidas Novas, Santa Maria Maior and Estrela are the main investment destinations, representing 14% to 9% of sales of buildings of this size in these 12 months. Areeiro, Alvalade, Penha de França, Ajuda and Campolide, with shares of only 2% to 6% of the total, are the new points of interest, with the largest growth in trading of these assets until the second quarter of this year, with increases of more 50%.

It should be noted that, overall, the number of sales of buildings over 500 square meters fell 9% in the total territory covered by the SIR-Urban Rehabilitation, with decreases always above 16% in all parishes.

Source: VidaImobiliaria.com

Published By Jeff Desjardins | October 8, 2018

Note: Cities with a “Bubble Risk” (>1.5) are shown in red

The World’s Biggest Real Estate Bubbles in 2018

With the current stock market bull run reaching nearly 10 years in length, it’s understandable that many investors are nervous about the end of the party coming sooner than later.

However, as UBS notes in its latest report, there is also growing concern about another prominent bubble that’s been in the works since the aftermath of the financial crisis.

Large amounts of easy money have fueled real estate bubbles in the world’s major cities – and the Swiss investment bank now sees the property markets in six global cities as being at risk.

The Bubble Index

In the 2018 edition of the bank’s Real Estate Bubble Index, here are the major cities around the globe that are in or near bubble territory:

Any city with a score over 1.5 is considered at “Bubble Risk”, and right now those include two cities from Canada, one from Asia, and three from Europe.

Hong Kong (2.03) tops the index this year, leaping past Munich (1.99), Toronto (1.95), and Vancouver (1.92) which all remain at bubble risk themselves. Amsterdam and London are the two other cities that score higher than a 1.5 on the rankings.

It’s also very important to note that there are four cities that score just under the 1.5 threshold: Stockholm (1.45), Paris (1.44), San Francisco (1.44), and Frankfurt (1.43).

A Coming Correction?

Investor and writer Howard Marks has noted in recent months that the wider market is in its “8th inning”, and the same case could be made for real estate.

Historically, investors have had to be alert to rising interest rates, which have served as the main trigger of corrections.

– UBS Report

According to UBS, the cracks are already starting to show at the top end of the market, with housing prices declining in half of last year’s list of bubble cities. Some of the worrying factors include rising interest rates, as well as growing political tensions as the crisis of affordability makes it harder for average people to live in these global financial centers.

Here is annualized growth in percent over the last year, as well for the last five years for cities in the index:

As you can see, some of these cities have had negative growth over the last 12 months, including New York, Toronto, Sydney, London, and Stockholm.

Charting Specific Markets

In Hong Kong, you need to work 22 years to afford a 645 sq. ft (60m²) apartment, when that took just 12 years just a decade ago. In recent years, Hong Kong’s ascent to becoming one of the biggest real estate bubbles has become very evident, especially when juxtaposed with Singapore:

In Canada, the two cities in the index are starting to go in alternate directions, although recent signs also point to a potential slowdown in Vancouver:

Finally, the U.S. market – which felt the pain of the housing crash in the late 2000s – is home to zero cities in the bubble risk category, according to UBS.

Whether it is a bubble or not, many people agree that San Francisco’s housing situation is still a crisis. In the Bay Area hub, 60% of all rental units are in rental-controlled buildings, and the median single-family house price is a hefty $1.7 million.