The stabilisation of the property market and house prices in Portugal which started in 2013 is set to continue throughout this year, the latest report released by the National Statistics Institute (INE) . It comes after the price per square metre of homes in the nation hit a record low in the first quarter of last year. They have been recovering ever since and it is this recovery that is expected to make the market yet more attractive to those who are looking to invest in European second homes.
According to the INE, prices fell last year to a low of €981 (£804) per square metre, which was the lowest level they had reached for more than ten years. However, since then it has been the case that prices have been on the rise, and by the end of the third quarter of last year, they had witnessed an increase of some four per cent. This left the average price per square metre across Portugal sitting at €1,019.
A separate report released by Fitch Ratings has shown that the current trend for rising property prices could be sustained in the years ahead, largely thanks to two factors. The first of these is the fact that the price for property in Portugal are among some of the lowest in Europe, which is enticing for buyers looking to either buy to let or sell on in the future if and when prices recover. The other factor domestically is that the general cost of living and household disposable income have returned to levels not seen since before the financial crisis.
" However, the risks remain on the downside, especially since most mortgages in Portugal are variable rate and are therefore extremely vulnerable to a surge in interest rates. Also, performance might be negatively affected by the increased segmentation of the labour market, where long term unemployment reached 60 per cent of the total unemployed in the first half of 2013, " the report concluded.