The Portuguese property market has had a run of bad luck of late but it seems its misfortune has been to the benefit of one group of buyers. Retirees across Europe are flocking to the country to take advantage of low real estate prices, tax breaks and the pleasing climate, Sapa reported. The financial position of many over 65s means they are well placed to operate within a cash market and the recession has caused the age group to become more active in overseas markets.
Carlos Vinhas Pereira, head of the Franco-Portuguese Chamber of Commerce and Industry, told the news portal: "Many British, German and Scandinavian seniors seeking sun already come to Portugal, in particular the Algarve, and the number of French visitors is up sharply." Lisbon has recognised the potential of retirees and the role they can play in reinvigorating the property market. To capitalise on interest, a tax sweetener was introduced at the beginning of 2013 giving all Europeans with a private pension exoneration from Portuguese income tax on payments received in their home countries.
"Austerity measures that the government has imposed to satisfy the troika of creditors has contributed to lowering domestic demand, hence the idea to call outside to kickstart the motor," Mr Vinhas Pereira explained to Sapa. However, Portuguese nationals have not been too happy with the tax breaks, as they continue to suffer from pension and wage cuts.
Nonetheless, the property market could do with the boost offered by retirees. While stability is returning to some key markets, values and activity remain relatively depressed. In places like Lisbon, Porto and the Algarve,the sales market headline price was recorded at -37, according to the latest real estate index from the Royal Institution of Chartered Surveyors and Confidencial Imobiliario. This figure is indicative of falling prices and is almost unchanged from the months previous.
The balance of agreed sales has been relatively stable across recent months, but is still low at -8 in July. It is believed this is down to a slump in the rental market, with tenant demand falling and new landlord instructions falling for the first time since the index began.
Article by +Danny Bance on behalf of Propertyshowrooms.com