(Bloomberg) -- Home sales in Portugal slumped in the first six months of the year as rising interest rates and a government decision to end incentives for some foreign buyers weighed on the housing market, according to real estate services provider Jones Lang LaSalle. 

Home sales fell 22% to 68,000 units in the first half of the year from the same period a year earlier, JLL said in a presentation on Thursday. In 2022, about 168,000 units were sold in Portugal, the highest sales volume on record.

Still, property prices aren’t expected to drop any time soon as demand for homes continues to outstrip availability, according to JLL. 

“There continues to be a structural shortage of supply,” Joana Fonseca, head of research at JLL, said at a presentation in Lisbon on Thursday. “The pace of new homes arriving on the market continues to be well below the volume of demand.”

Also read: Portugal Plans to End 10-Year Tax Break for New Residents 

Earlier this year, Portuguese Prime Minister Antonio Costa announced he was shutting down the golden visa program to curb speculation in the property market and help end a housing crisis in cities including Lisbon, where property prices more than tripled since 2015. His socialist government will also end the so-called non-habitual resident regime next year, which offers lower income tax rates for a 10-year period to qualifying people who move to the country.

Both programs helped revive Portugal’s moribund real estate market after 2011, as the country struggled to exit a deep recession. While these program still help attract foreign property buyers, they now account for only a small fraction of property deals in Portugal.

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