Portugal property market struggles back on its feet
With the ongoing saga of lifeline bail-outs to eurozone nations, property buyers might be forgiven for channeling their buy-abroad aspirations elsewhere. Yet the latest data from the Royal Institution of Chartered Surveyors suggests a ray of hope for sun-seeking investors: Portugal, where overseas buyers and second-home owners are starting to re-activate their property searches, feeling that, in some cases, the market is showing tentative signs of getting back on its feet.
Although the full impact of austerity measures (bolstered by a £70 billion EU-IMF bail-out package) has yet to fully hit home, signs of life in this default-wary country have been present since the second quarter of this year. A flat-lining economy has been seen as a milestone in the journey of gradual value recovery after two quarters of GDP shrinkage, and, infinitely better than the 1.1 per cent decrease analysts had predicted.
More interestingly perhaps, is the role real estate is playing in the fledgling climb back, boosted by rock-bottom interest rates, government stimulus and record foreign tourism revenue in the first half of the year.
Agents in tourist-centric regions such as the Algarve are reporting an increase in sales volumes, with wealthy clients starting to supersede the bargain-hunting hard core that dominated activity in the latter part of last year.
“The residential market is continuing to dip, with the national price balance falling from -55 to -59,” explains RICS senior economist Josh Miller: “The key difference now however, is that the downward spiral isn’t across the board.”