Portugal's real estate sector continues to boom

Portuguese house prices rose 11.2 percent in the second quarter from a year earlier, bringing them to new highs in a housing boom that started in 2014 and has benefited the economy, data showed on Friday.

Still, the data released by the National Statistics Institute (INE) showed a gentle slowdown in the pace of rises of the house price index after an annual increase of 12.2 percent in the first quarter.

Portugal's property sector has been a key motor of the country's economic recovery from a 2011-14 debt crisis.

It has been driven mainly by foreign buyers who have bought relatively cheap housing mainly in Lisbon, which is going through a tourist boom.

Compared with the first quarter, house prices rose 2.3 percent. House prices have risen without interruption since the start of 2014 and now stand at their highest level since INE started monitoring them in 2009.

In the second quarter, 45,619 residential properties were sold, for a total value of 6.2 billion euros ($7.29 billion), up 23.7 percent from a year earlier. The Lisbon area represented 36 percent of the total properties sold.

Some economists have said the property boom may soon run out of steam while others say Portuguese house prices are still below many European markets and remain attractive for foreigners.

Growth in the short-term rental markets to tourists has helped sustain house prices.