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Reports earlier this year from The Financial Times found that while house prices in the Euro Zone fell by an overall 4.6% in 2009 when compared to the previous year, prices of property in Portugal actually rose by 0.4%, in a global financial climate where even a price freeze would have been surprising. Here, property website House Sales Portugal (www.housesalesportugal.com) looks at why this may be, finding that a cautious approach to real estate development could hold the key.

In 2009, 23 European nations reported a drop in property prices of 2.8%, but a sharper drop of 4.6% was experienced across the Euro Zone, according to reports in March of 2010 detailed in The Financial Times. Property in Spain suffered price drops of 7.4%, but Portuguese properties not only withstood a similar price drop but in fact experienced a nominal rise of 0.4%, no mean feat in a global recession. Ireland was the country in the European Union to suffer the biggest property price drop last year, falling a significant 12.4%. Direct comparisons can be made between Ireland when it comes to the problems that led to this drop: rapid growth in supply without the corresponding demand, high debt and ambitious lending.

Portugal, in contrast, has not experienced a glut of newly constructed properties, as seen elsewhere in Europe, and the real estate market has been backed by more conservative banks and lower national debt levels. Portugal has benefitted from a more cautious real estate market, enjoying a calmer aspect than many of its neighbouring countries. The Portuguese property market experienced turmoil at the start of 2009, but stabilised throughout the year, according to the Director of Century 21 Portugal, Ricardo Sousa, speaking to The Portugal News. Mr. Sousa said that: People are still buying, but nobody is buying their dream house. They are much more cautious and are opting for cheaper homes, he said. It is this cautious approach from those wishing to buy Portuguese property, along with a sensible view on price from those selling property in Portugal, that has helped the country avoid the price drops suffered by so many of its EU neighbours.

Find out further information on the Portuguese property market at www.housesalesportugal.com.