(Bloomberg) -- Housing prices in Portugal continued to rise as demand from international buyers helps the runaway market defy pressure from higher interest rates. 

More than half of new developments listed for sale in the first half of the year have been sold out, Confidencial Imobiliario, which collects data on the property market, said in a statement on Wednesday.

Overall, home prices increased 6.2% in July from the same period a year earlier, according to real estate site Idealista. Demand from overseas is exacerbating a housing crunch that has kept prices rising and propelled costs in Lisbon to record levels — rising almost threefold since 2015. 

“About 65% of our clients are foreigners or Portuguese nationals living abroad,” said Jose Cardoso Botelho, head of Vanguard Properties, one of Portugal’s biggest developers with 22 projects in prime locations in Lisbon and on the Portuguese coast in Comporta and the Algarve. “The vast majority of these sales are for people who wish to live and work in Portugal.”

He expects delays in obtaining building permits for new homes to worsen the current shortage. 

Read More: Runaway Property Costs Push Portugal to End Golden Era of Visas

The Portuguese government has vowed to speed up the licensing process and also plans to end so-called golden visas. For more than a decade, the program has provided a pathway to residency for buyers from outside the European Union willing to invest more than €350,000 ($375,000) in property in the southern European country. 

In January, S&P Global Ratings forecast that house prices in Portugal would fall 4.4% this year after rising 6.8% in 2022. That would be the biggest decline among the 11 European countries covered by the ratings agency and would reflect the impact of higher interest rates in a country in which a large share of mortgages are variable rate, according to S&P.

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