Industry experts have a very positive outlook for the future of real estate in Portugal despite increased lending restrictions and a troubled global economy. Researchers at Infinito Real feel there are many good signs, particularly a surge in tourism that is hoped to bring foreign investment interest to the area. Market observers have noted in the past that end-of-summer sales are typically good as people come for vacation and decide it is a good location for a second home or an investment property. Many feel the market has a finally found a bottom in Portugal, and a full recovery is projected as early as 2015. For more on this continue reading the following article from Property Wire.
Real estate professionals in Portugal are hopeful that the country’s property market has reached bottom and will start recovering.
According to Stephen Anderson, managing director of property specialists Infinito Real, there are a number of positive sings, especially in the Algarve which has always been a popular location with overseas and second home buyers.
He pointed out that data from the latest Royal Institution of Chartered Surveyors survey revealed a slight improvement in activity and sentiment in the Portuguese property market, and reports from Portugal’s airports have recorded the highest number of passengers in over ten years as tourism was boosted over the summer.
It has been suggested that by 2012, Portugal will be making its way out of the economic slump and by 2015 will be completely recovered and seeing growth once more. ‘Whilst suggesting that growth could be some three years away sounds daunting, this is probably a realistic target for nationwide recovery,’ said Anderson.
He believes that areas such as the Algarve are already leading the way in turning the tables as property prices have fallen the least in this region, according to the RICS survey. It is hoped that a bumper summer of tourists, who flocked to Portugal for a cheap holiday amid the economic crises, will have generated fresh appeal to holidaymakers looking for a second property.
‘We have seen a marked improvement of interest in purchasing property in Portugal off the back of a busy summer. The greatest problem for us at the moment is finance and therefore cash buyers really are the purchasers in the driving seat,’ said Anderson.
‘With that said, agents must carefully manage the expectations of investors who still believe that asking prices are just a figure to be heavily negotiated. Discounts of up to20 and 20% are simply not available, as these prices are already discounted by at least this amount, although some movement can be negotiated. The next few weeks will determine whether the summer has helped the market turn a corner,’ he added.
Unlike Spain and some other countries, oversupply is not an issue in Portugal and as a result, there is not the number of repossessions that many eager investors believe. ‘Those repossessions that are available often have mortgages on them for more than what you would be able to buy the property for, and therefore the banks still have to get back that amount, which blocks them from being able to offer any greater discount,’ explained Anderson.
‘Significantly once the banks do start to lend again, the Algarve will be best positioned for a quick recovery, which provides a window for investors to make the most of property prices at the lowest they are likely to be, and a light at the end of the tunnel for those hoping to make a move in the future,’ he added.
This article was republished with permission from Property Wire.