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Country risk, from the local press

Portugal · Country watch

Housing Market Risks, Licensing Code Changes

Portugal faces housing market risks and new licensing rules affecting retail businesses.

· · 9 sources

The picture Mixed

Business conditions in Portugal are mixed with regulatory changes in retail and housing market risks highlighted by the IMF. This week, businesses should watch for potential impacts on real estate and retail sectors.

In this briefing Michaela Erbenova · International Monetary Fund · Banco de Portugal · Portuguese government · Instituto Nacional de Estatística

Regulation

  • finance

IMF warns of housing market risks in Portugal

Headquarters of the Bank of Portugal, at Lisbon
Headquarters of the Bank of Portugal, at Lisbon Jsobral, CC BY-SA 3.0 via Wikimedia Commons

The International Monetary Fund (IMF) has identified the soaring housing prices in Portugal as a major vulnerability for the country's financial sector. Michaela Erbenova, Deputy Director of the IMF's Monetary and Capital Markets Department, highlighted at a conference organized by the Banco de Portugal that housing prices in Portugal have surged 169% since 2015, compared to a 55% increase in the Eurozone. This rapid growth raises concerns about financial stability, particularly in the context of potential interest rate hikes.

Impact Lenders in Portugal face increased risk exposure due to the rapid rise in housing prices.

Sources: Jornal Económico ↗, O Minho ↗

  • retail
  • public-sector

New licensing code to curb 'facade stores'

The Portuguese government is drafting a Business Licensing Code that will allow local councils to restrict 'facade stores' in approximately 15% of municipalities, according to Jornal de Negocios. This measure aims to protect historic shops and prevent the proliferation of businesses that only serve as fronts. The new code is part of a broader effort to preserve local commerce and heritage.

Impact Retailers in Portugal may face new restrictions affecting store operations in certain areas.

Sources: Jornal de Negocios ↗, Observador ↗

Disruption

Nothing significant reported today.

Internal tension

Nothing significant reported today.

Safety & health

Nothing significant reported today.

Companies

Nothing significant reported today.

Markets

Portuguese housing price growth slows to 16.5%

Housing prices in Portugal increased by 16.5% year-on-year in the second quarter, marking a slowdown from the 17.8% rise in the previous quarter, according to the Instituto Nacional de Estatística (INE). This is the second consecutive quarter of deceleration in housing price growth, reflecting a potential cooling in the real estate market.

Impact Real estate investors may see moderated returns as housing price growth slows.

Sources: Observador ↗, RTP ↗

Trade

Nothing significant reported today.

Politics

Nothing significant reported today.

Also today in Portugal

Sources in this briefing

Sources: each headline links to the original article on the publisher's site.

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