The Portuguese property market has been through the ringer lately, with prices falling and activity levels dropping off across most of the country. However, as the Golden Visa residency scheme takes effect, there is hope among many that the dark days surrounding the recession are finally in the past. There are certainly indications that this is the case, with one Portuguese estate agent reporting an 80 per cent increase in sales year-on-year. Charles Roberts, managing partner of Fine & Country Cascais, explained to A Place in the Sun that things are beginning to look up. "There is a feeling in Portugal that the worst of the country's economic crisis is over and that real estate prices have finally bottomed out," he said.
However, this sense of positivity is yet to be mirrored in market conditions. "This does not mean that there is any significant increase in domestic residential transactions as there is no liquidity in the system as the banks are still restructuring themselves and still trying to offload building stock that they have repossessed from bankrupt developers," Mr Roberts stated to the news provider. The situation isn't much better for the overseas market either. In fact, Mr Roberts would go so far as to call it "grim".
He explained to A Place in the Sun that there are countless resale properties in popular tourist spots like the Algarve with mortgages, but owners can't meet repayments or the maintenance costs of owning a home abroad. Consequently, they want to shed these assets and are having to sell at any price to do so. Unsurprisingly, many are faced with negative equity but this causes wider issues for the market. Selling homes at severely low prices depresses values and means developers are finding themselves "hamstrung" by the resale market, Mr Roberts explained to the news provider.
Nonetheless, there are signs of positivity for the sector. According to the Royal Institution of Chartered Surveyors and Confidencial Imobiliario, during July key residential markets in Portugal began to stabilise. Negative price expectations became less widespread than they were six or 12 months ago in places like Lisbon, Porto and the Algarve. The sales market headline price was recorded at -37 too - showing that while prices are still falling, the speed at which they are doing so isn't increasing.
Article by +Danny Bance on behalf of Propertyshowrooms.com