Bank valuations of real estate reach new highs

According to the National Institute of Statistics (INE), there has been an increase in the price per square meter (m2) used for the approval of housing credit. In November, the average value of bank assessment increased from €1,212/m2 to € 1,215/m2 for the 20th consecutive month, €3 more than the previous month. This figure represents an increase of 0.2% compared to October and 6.2% (€71) compared to the same period last year. The valuation amount for apartments rose more (7%) than villas (4.8%). In general terms, bank valuations of real estate rose by around €70/m2 in one year.

The most significant increase in values occurred in the Algarve, both in-relation to the previous year (10%), and also in relation to valuations of apartments. In this region, the average valuation was €1,589/m2 compared to the average value of the country (€1,277/m2). The INE data on the average value of bank valuation in the Algarve was also higher than the national average, by 30%.

Given this data, Casas do Barlavento clearly explains the factors that influence the valuation of real estate, so that it doesn’t impair the creation of a housing loan or the transfer of credit to another financial institution:

1. The location of the property, specifically the floor on which it is located (if applicable - apartment in building); the view, the sun orientation and the existing accessibility;

2. The quality of the construction, its finishes and the plot where it is located;

3. Date of construction;

4. For the purchase of used houses it is crucial to evaluate the conservation state of the property;

5. Typology and disposition of property;

6. Available equipment (appliances, air conditioning, furniture, etc.);

7. Facilities included, such as parking, storage, green spaces, swimming pool, lift, etc;

8. Market - current supply and existing demand levels.

Of these factors, we believe that the state of the market (currently with high demand and low supply) and the increase of new housing construction are the main determinants for such a marked increase in the value of real estate bank valuations, both in the Algarve and throughout the country.

To corroborate these findings, the Association of Industrial Construction and Public Works (AICCOPN) detailed that "8,620 municipal building permits were issued by the City Councils and rehabilitation of residential buildings, an increase of 22.6% year-on-year. As for the licensing of new buildings, there was an increase of 38.2% year-on-year to a total of 11,404 ".

The valuation of property also makes sense in the process of the sharing of inheritance, when the heirs don’t agree with the value of the property. Just like when you think of selling the house, so you can sell it at the current market value.

The ideal situation is to have a certified agent put your property up for sale, thus obtaining a detailed and complete valuation report. If you are interested in understanding how much your home is worth in the current market, please contact us. Casas do Barlavento, as a specialized agency, can evaluate your property for free.