When losing €40,000 becomes part of the daily routine
Some things mean very little when they happen once. When they start happening repeatedly, perhaps it is worth stopping to take a closer look.
Over the past few months, I began noticing how often price reductions were appearing on properties being advertised in the region. Some were small and entirely understandable. Others were more striking.
At some point, a simple question came to mind: was I simply noticing them more because this is my job, or was there actually a pattern worth looking at?
So I decided to count them.
For 63 days, between 10 July and 10 September, I tracked price-change notifications on a well-known property portal, covering an area that includes Caldas da Rainha, Óbidos, Peniche, Bombarral, Cadaval and Alfeizerão, in the municipality of Alcobaça.
There were 865 notifications.
The information was then organised and analysed. The result was more interesting than I expected.
63 days looking at a regional market
It is worth explaining what these figures are — and what they are not.
This is not a scientific study of the Western Portugal property market. It is not a statistical sample designed to represent every property, seller or transaction.
It is an observation covering 63 days, based on 865 notifications from a property portal, which were subsequently organised and analysed.
It is also an observation made by someone who works in this market every day and therefore sees these figures alongside what is happening through contact with owners, buyers and other market participants.
That has limitations. But it allows us to look at a significant number of actual occurrences, rather than discussing the market solely through perceptions or a handful of individual cases.
For anyone wishing to see the information behind this analysis, the file containing the data collected can be downloaded here:
Here is what the figures show.
On 87.3% of the days analysed, at least one price reduction was recorded.
Of the 865 notifications, 19.4% related to price reductions.
The average reduction was €39,762, equivalent to around 8% of the previous asking price. On average, asking prices fell from €494,254 to €454,491. It is important to remember that these adjustments take place before a potential buyer has been identified and, therefore, before any eventual negotiation.
The largest reduction was €370,000. The smallest was €1,100.
Houses accounted for 73.8% of the reductions, while apartments accounted for 26.2%.
As for the condition of the properties, 94.6% were resale properties and 5.4% were new.
There is another interesting detail: among the price reductions recorded for new properties, 88.9% were houses.
This figure needs to be treated with caution. The number of new properties with price reductions is small and does not support a statistical conclusion. But, together with the other figures, it does help raise a question.
Lowering the price is not the problem
Lowering a price is a normal part of how a market works.
A seller may realise that their initial expectations were too high. A competing property may come onto the market. Circumstances may change. Or they may simply conclude that adjusting the price is preferable to waiting indefinitely.
None of this is particularly unusual.
What caught my attention was not the existence of price reductions. It was their frequency and the average size of the adjustment.
A difference of almost €40,000 between one asking price and the next is not a minor correction.
And when this type of adjustment appears repeatedly over a two-month period, perhaps it is worth looking beyond the simplest explanation: "prices are too high".
Too high for whom?
And for what?
What if the problem is not just the price?
This is where the figures become more interesting.
Almost three quarters of the reductions recorded were for houses.
That, in itself, does not mean that there is an oversupply of houses. To reach that conclusion, we would need to know the composition of the entire market, how long properties remain on the market, the transactions actually completed, and many other factors that are not covered by this analysis.
But there is one observation that has become increasingly clear in my day-to-day work: there appears to be greater demand for apartments today, and less demand for houses, than we were used to seeing.
I am not necessarily talking about financial capacity.
A new house and a new apartment can have similar prices. In some locations, and depending on their characteristics, an apartment can even cost more than a house.
The issue may be something else: the type of home people are looking for may be changing.
For many years, in smaller cities and towns, when a young couple had the possibility to choose, a house was often the preferred option — ideally with a garden, always with garage and, if possible, a swimming pool.
Today, at least from what I observe, that preference seems less clear-cut.
Less maintenance, proximity to services, location, security, energy efficiency or simply changes in lifestyle may all be factors. But at this point we are dealing with hypotheses, not facts demonstrated by this analysis.
There is another element that deserves consideration: demand from non-residents.
The presence of this type of buyer had, during certain periods and in certain segments of the Portuguese market, a significant influence on price levels. The Golden Visa regime is one example of how an additional source of demand, subject to specific investment criteria, can affect particular market segments.
We cannot directly transfer that example to Western Portugal, nor attribute a causal relationship to property prices in this region.
But there is currently a perception among those who follow the market that the inflow of non-resident buyers has decreased compared with a few years ago. And, within this segment, demand is concentrated largely on houses.
If part of the demand that traditionally absorbed this type of property has declined, one question follows: is all the existing supply still suited to the demand that remains?
Prices, however, do not appear to have fallen automatically to the same extent.
€454,000 is still €454,000
Let us return to the average figure.
A property whose asking price falls from around €494,000 to €454,000 has undergone a significant reduction.
But €454,000 is still €454,000.
The next question is unavoidable: how many buyers in this market are looking for a property at that level — and how many of those properties correspond to what they are looking for?
This does not mean that there are no buyers. There are.
Nor does it mean that every property advertised at that price is overpriced. Every property has its own characteristics, and market value is not determined by averages alone.
It simply means that a property may have a perfectly defensible market value and, at the same time, not correspond to what a significant part of local demand is looking for or prepared to buy.
These are different things.
And when the average reduction still leaves the property at a high level, perhaps the issue is not simply finding the right price.
It may be about understanding who we are building for, or keeping a particular type of property available for.
There is more than one way of not lowering the price
The figures in this analysis show only one possible response from the supply side: lowering the asking price.
There are others.
A developer may decide not to start a project.
They may postpone construction.
They may build only the structure and wait for better conditions or for a buyer.
They may complete the property and keep it in their portfolio for longer.
Or they may simply decide not to bring a particular property onto the market.
None of this appears in the 865 notifications analysed.
The reductions should therefore not be read as a complete picture of the relationship between supply and demand. They show what happens when an owner chooses — or accepts — to respond through the asking price.
That distinction matters.
Because supply that does not reduce its price may simply disappear from the market. Or it may never be built in the first place.
Summer is also part of the picture
There is another time-related limitation that should not be ignored.
The data was collected between 10 July and 10 September.
Traditionally, summer is a period of greater interest in the region. People have more time to view properties, more people return temporarily to Portugal, and the weather, light and opportunity to experience a property and its surroundings in better conditions can also influence buying decisions.
The old pattern of emigrants returning in large numbers during the summer no longer has quite the same significance it once did. But seasonality has not disappeared.
I do not have enough data to make a seasonal adjustment to this analysis.
So I will not claim that reductions would be greater or smaller at another time of year.
But it leaves an interesting question to follow: what happens when the summer demand disappears?
Different markets, different problems
Perhaps this is where the housing debate requires some caution.
When we talk about "the Portuguese property market", we often bring together very different realities.
Lisbon is not Caldas da Rainha.
Porto is not Óbidos.
A tourist area is not the same as a town where most buyers live, work and pay taxes.
A market where demand is significantly greater than supply may face very different problems from one where properties are available but part of that supply is not finding buyers at the asking prices.
The responses may not need to be the same either.
That does not mean that one region is right and another is wrong.
It simply means that a different problem may require a different response.
A snapshot, not a verdict
The 63 days analysed do not explain every reduction.
From these figures, we do not know why each owner reduced the price, how many of these properties were subsequently sold, what they sold for, or whether the reduction actually led to a transaction.
Nor do we know how many properties remained outside the market because their owners decided not to reduce the price.
We only know what this observation shows.
And it shows something worth paying attention to: during a period traditionally favourable to demand, price reductions were frequent, many of them significant, and the majority concerned houses.
My reading is not that houses are no longer in demand.
It is that we may be seeing a change in the relationship between the supply that exists and the demand available to absorb it.
And that difference may be more important than simply asking whether prices are high or low.
Because before asking how much a home costs, perhaps we should start by asking:
What kind of home is it?
Where is it?
And who was it designed for?