Those looking to buy some prime European real estate might want to take a look at Portugal, where the property market is heating up thanks to an economic recovery.
The Portuguese property market is an exciting opportunity for potential investors and buying a house now could mean taking advantage of further price rises and providing a substantial investment for the future.
Portuguese property prices are rising right across the country
Figures published by the economic data website Trading Economics point to a considerable uptick in property price growth in Portugal, with the prices index rising by 8.2% on a yearly basis between 2017 and 2018.
Although this considerable growth is expected to moderate in the coming months, industry estimates are still for prices to keep rising for the rest of the year, gaining around another 5%.
Portuguese estate agents Confidencial Inmobiliario Director Ricardo Guimarães says that residential properties might be moving out of the price range for Portuguese citizens, but not necessarily international buyers:
‘Prices are recovering and, at a general level, are getting closer to pre-crises values. This is true from a national and regional perspective.
‘In some markets, especially Lisbon, it is clear that price trends are disconnected from household’s income recovery.
‘This is starting to cause concern for real estate agents, who mention the difficulty in finding houses for sale at prices compatible with domestic and traditional demand.’
Shortage of new properties on the market pushes prices higher
A significant factor behind the accelerating Portuguese property price growth has been a drop in the number of properties coming onto the market.
This ties into the basics of supply and demand: if there is continued demand for Portuguese property but nobody is looking to sell up then prices naturally appreciate until supply increases.
The latest drop in sale properties makes it 10 consecutive months of declines; Porto has been the worst-affected region with around a 25% fall in properties reported in April.
This dry period could fade in the future as Portugal is currently a hive of construction activity, with cities like Lisbon seeing a particular focus on renovation and fresh developments.
This is largely down to easing restrictions on overseas property investment, which includes so-called ‘golden visas’ that allow non-EU nationals to claim residency if they buy property worth between €350,000 and €500,000 (depending on age and location).
Summing up the benefits presented by construction and renovation across the country (particularly in Lisbon), Real Estate Professional Rafael Ascenso says:
‘There is a market for this rehabilitation, and we must make the most of it.
‘This investor allure has allowed the creation of a pleasant city as well as the revival of districts which had been abandoned. It’s a one-off opportunity.’
What’s next for the Portuguese property market?
Suggesting that continued Portuguese economic growth could keep heating up the property market, Simon Rubinsohn of the Royal Institute of Chartered Surveyors (RICS) says:
‘Recent evidence points to 2018 starting off on a [strong] footing, with this solid momentum likely to provide a favourable backdrop for housing market activity going forward.’