Despite crisis Portuguese properties remain in demand !

Portuguese property in demand
21/2/2009

Following on the heals of EU figures showing the cost of real estate in Portugal had actually increased despite its economy being in the grips of a recession, thereby contradicting trends elsewhere in Europe, interest from Britons looking to purchase property here has climbed to new heights in the upmarket real estate sector. Estate agents in the Algarve have backed this up, and while saying demand for apartments has dwindled, luxury homes are as sought-after as ever.

Portugal has made significant strides towards catching its Iberian neighbour, Spain, as the most searched for destination to buy a home abroad based on country page views, and property views, on homesoverseas.co.uk, over the past month, the website said earlier this week.

Britons using this site to search for property abroad are increasingly interested in Portuguese homes, and the country has now moved from fourth to the second most popular destination to buy home, moving past traditional favourites France and Italy.

The website explains that “in spite of the global economic downturn, enquiries for properties overseas for sale remain firm, confirming the desire amongst Britons to own a home abroad remains as popular as ever.”

The top ten most searched destinations in which to a buy a home abroad are Spain, Portugal, France, Italy, United States of America, Turkey, Greece, Cyprus, Australia and Egypt.

In has been noted that and while North American and the majority of European real estate markets are being negatively affected by the economic crisis, Portugal is one of few EU countries where property prices are actually still rising, according to the European Central Bank.

In its monthly report published earlier this week, in which housing prices from nine European countries during the third quarter of 2008 were surveyed, the Central Bank listed Portugal as recording the second highest price rises, in comparison to the same period of 2007, surpassed only by Slovakia.

Results confirm a 4.8 per cent price jump in residential Portuguese property in the period between June and September last year, compared to the same period in 2007.

While data pertaining to the last quarter of 2008 is not yet officially available, a reported increase of 4.7 per cent, in comparison to the same period of 2007, was registered in Portugal.

The construction sector in Portugal is also showing positive results, with an overall growth of 0.5 per cent during the last two months of 2008 and the first month of 2009. It is hoped that growth, albeit slight, within this industry will help keep Portugal’s real estate afloat.

Overall, property prices in this country in 2008 are believed to have risen by an average of 3.9 per cent, in comparison to 2007.

However, Ireland, Spain, Malta and Finland’s real estate markets have registered negative turnovers, with Ireland and Spain, suffering drops of 9.7 and 3.2 per cent respectively.

As well as being in its first economic recession since 1993, Spain is also showing the worst economic results for 15 years, its national institute for statistics revealed last week.

Estate agents contacted by The Portugal News the past week, have expressed contained optimism in the immediate future for the real estate market.

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One long-standing agency in the western Algarve explained that while “Resale property prices have held up, buyers are making offers which are often accepted.”

The same agency explained that sales from “UK buyers are encouraging, but concerns over the exchange rate are holding them back”.

However the agency added that most would be ready to act out their dream of owning ‘a place in the sun’ once the pound strengthens to around €1.20, as “most prospective buyers have made their minds up to move here, they are just waiting for the right moment”.

“Villas priced at one million euros and above are attracting the most attention”, explained the Lagos agency.

Overall, December, January and February are usually the worst months for sales, which are still down ten to 15 percent when compared with the same period 12 months ago.

Another agency, located in Vilamoura, shared similar views, with a spokesperson saying Britons “are still looking to buy property in the Algarve, although they are now looking for better deals and hoping to grab people who are in desperate need of selling.”

He added there are currently very good deals in the central Algarve and that the hardest hit market has been apartments, as interest has been limited, though price cuts of up to €50,000 are increasingly common among desperate sellers.

But, says agency, “There are people who have homes up for sale, who do not feel the immediate need to sell, and are therefore not reducing their prices at all.”

With courtesy of the Portuguese News.