Residential property prices in Portugal have fallen further due to weak demand and confidence in the market is fragile, according to the latest report from the Royal Institution of Chartered Surveyors.

At the national level, weakening demand is the main factor weighing down on prices while regional price trends show much greater convergence, the February RICS/Ci Portuguese Housing Market Survey shows.

Indeed, prices fell at broadly the same pace as during the previous two months, activity fell at a faster pace but confidence, whilst still negative was more or less unchanged on the month.

Real estate sales agents are recording far sharper price falls than residential developers and the outlook for prices remains far more negative than that for sales, it also shows.

At the regional level, there was far more convergence in price trends during February than in January. Previously there was a sharp difference between the price trends in Lisbon and Porto on the one hand and the Algarve on the other hand. This survey round, however, there is hardly any difference in regional price trends.

‘The Portuguese housing market can be characterised by falling prices, falling activity levels and negative confidence. Interestingly, the RICS/ Ci February data shows that at the national level, price falls are being driven by falling demand, with the flow of property coming onto the market actually slipping,’ said RICS senior economist, Josh Miller.

‘Weak housing demand is hardly surprising given the news flow. Inflation is rising, the economy is contracting again and the unemployment rate is the highest on record,’ he added.